Stocks in Asia rose, with a weaker yen supporting Japanese equities and Hong Kong shares rallying following back-to-back weekly declines in the MSCI Asia Pacific Index.
Shares in Shanghai and Hong Kong jumped before a decision Tuesday on whether MSCI Inc. will include China shares in global indexes. The yen slumped against all its major peers. The kiwi climbed as a gauge of the services industry expanded at a faster pace. Oil continued to retreat, trading near the lowest level since November. Gold was little changed after two weeks of losses.
Global equities are climbing back after a technology-sector selloff weighed on stocks last week. Trading volumes were the highest since mid-March as poor housing data and a drop in consumer sentiment added to signs the American economy’s growth rate may be slower than forecast. That’s keeping bond yields down amid a subdued pace of inflation that’s sowed doubts about the Federal Reserve’s planned trajectory for monetary tightening.
There were more encouraging signs from Asian data on Monday, including New Zealand’s services report. Japan had a surprise trade deficit in May, as stronger-than-expected imports overpowered the continued growth in exports. Australian central bank Governor Philip Lowe said the country can achieve stronger growth if lawmakers can surmount current political gridlock. One weak spot was China, where home prices increased in fewer cities last month in the wake of cooling measures imposed by local authorities.
Political wrangling in Washington took another turn over the weekend. U.S. President Donald Trump isn’t under investigation by special counsel Robert Mueller, a member of the president’s legal team said, despite Trump’s repeated comments on social media that he’s the target of a “witch hunt.” “The president is not and has not been under investigation for obstruction,” attorney Jay Sekulow said on NBC’s “Meet the Press.”
On the agenda for markets this week: MSCI Inc. announces whether it approved Chinese-listed stocks in its global benchmarks. The $6.8 trillion onshore market is the world’s second-largest and accounts for 9 percent of global stock value, but has been rejected for index inclusion three times by MSCI over issues including capital controls and long trading halts. Morgan Stanley says odds of approval are just over 50 percent.
- Chicago Fed President Charles Evans and Fed Bank of New York President William Dudley are both due to speak in New York Monday. They are the first of a slew of Fed appearances scheduled for this week including Vice Chairman Stanley Fischer and Governor Jerome Powell.
- MSCI’s decision on Chinese equities is expected Tuesday.
Here are the main moves in markets:
- The MSCI Asia Pacific Index increased 0.6 percent as of 1:21 p.m. in Tokyo. Japan’s Topix index jumped 0.7 percent, and South Korea’s Kospi index gained 0.3 percent.
- Australia’s S&P/ASX 200 Index rose 0.3 percent. Woolworths Ltd. fell 3.9 percent, the most since September, as it joined a slump in global grocery companies after Amazon.com Inc.’s decision to buy Whole Foods Market Inc. in the U.S.
- Hong Kong’s Hang Seng Index climbed 0.9 percent, after its first weekly decline in six weeks. The Hang Seng China Enterprises Index jumped 1.4 percent, the most since May 25. The Shanghai Composite advanced 0.7 percent.
- Futures on the S&P 500 Index rose 0.2 percent after the underlying gauge posted a 0.1 percent advance last week.
- The yen declined 0.1 percent to 111.01 per dollar.
- The Australian dollar was flat, trading near the highest level since the end of March. New Zealand’s dollar strengthened 0.4 percent. The Korean won climbed 0.4 percent, after dropping 0.9 percent on Friday.
- The pound fell less than 0.1 percent to $1.2776. Formal negotiations on the U.K.’s exit from the European Union are due to start.
- The euro was little changed as French President Emmanuel Macron’s party was poised to win the biggest majority in 15 years. The voter turnout was only about 44 percent.
- The yield on 10-year Treasuries rose less than one basis point to 2.16 percent.
- West Texas Intermediate crude oil slid 0.4 percent to $44.58 a barrel, near the lowest level since November.
- Gold slipped less than 0.1 percent to $1,253.02 an ounce, heading for an eighth decline in nine sessions.