Asia stocks rise on robust Wall Street performance

SINGAPORE: Asian stocks rose on Monday thanks to a robust Wall Street performance at the end of last week, while the US dollar extended gains made after much stronger than expected June employment data.
European stock markets were also poised for a more positive start, with financial spreadbetter CMC Markets expecting Britain’s FTSE 100 and Germany’s DAX to open up 0.4 per cent each, and France’s CAC 40 to start the day 0.3 per cent higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 per cent while Japan’s Nikkei rose 0.7 per cent.
Australian stocks were up 0.3 per cent and South Korea’s KOSPI added 0.2 per cent.
Hong Kong’s Hang Seng gained 1 per cent, though China’s bluechip shares were flat.
On Friday, Wall Street closed higher after US jobs growth beat forecasts.
However, a lag in wage increases led investors to bet wage data would limit the extent of the Federal Reserve’s hawkishness.
The Nasdaq led gains with a 1 per cent jump, while the S&P 500 added 0.6 per cent and the Dow Jones Industrial Average rose 0.4 per cent.
“Strong headline growth, amid poor wage growth, is seemingly a perfect storm for equities,” Chris Weston, chief market strategist at IG in Melbourne, wrote in a note.
“Looking ahead, traders will continue to watch fixed income like a hawk for further knock-on effects into foreign exchange and equities,” particularly with speeches by Fed Chairwoman Janet Yellen and Governor Lael Brainard due this week, Weston added.
The 10-year US Treasury yield hit a two-month high of 2.398 per cent on Friday. It was at 2.3909 on Monday.
The dollar inched up 0.2 per cent to 114.135 yen early on Monday, extending Friday’s 0.6 per cent jump on the jobs data.
“The solid jobs report gives us more reason to expect the Fed to announce that it’s prepared to start trimming its balance sheet,” said Mitsuo Imaizumi, Tokyo-based chief foreign exchange strategist for Daiwa Securities. “By contrast, the Bank of Japan is nowhere near a policy exit, and it’s taking steps that weaken the yen,” he said.
The dollar index, which climbed 0.2 per cent on Friday, was little changed at 96.028 on Monday.
The euro was fractionally lower at $1.1402 on Monday, extending Friday’s 0.1 per cent decline.
The Group of 20 meeting in Hamburg over the weekend did not have much impact on markets on Monday.
At the meeting, the world’s leading economies broke with the US on climate policy and US President Donald Trump and his Chinese counterpart Xi Jinping agreed to work together on North Korea’s nuclear threat and bilateral trade.
Trump also discussed forming a cyber security unit to guard against election hacking with Russian President Vladimir Putin, though he later backtracked from that position.
In commodities markets, oil crept higher on Monday after sliding on Friday on a report showing US crude production rose last week, just as the Organisation of the Petroleum Exporting Countries exports hit a 2017 high, rekindling concerns about a supply glut. Gold inched down 0.2 per cent to $1,210.92, close to the four-month low touched on Friday as the dollar surged and demand for risk assets rose.— Reuters