Asian stocks began the week in the green, edging ahead on Monday despite an air of uncertainty on trading floors with doubts over China’s recovery and rising US Treasury yields the biggest distractions.
Tech stocks helped Tokyo and Hong Kong keep their heads above water but a muscular dollar and some profit lock-ins kept things largely subdued across the region.
Japan’s Nikkei share average gave up gains to end flat as investors booked profits around the 33,000 level. The Nikkei index inched up 0.05% to close at 32,585.11, after rising as much as 1% earlier in the session, tracking Wall Street’s strong finish at the end of last week. The broader Topix was flat at 2,336.62.
Also on AF: Chinese Chipmaker Sues Micron For Alleged Patent Infringements
Chip-related shares rose after the tech-heavy Nasdaq Composite posted its biggest one-day percentage rise since May 26 on Friday. Chip-making equipment maker Tokyo Electron rose 1.74% and chip-testing making equipment maker Advantest gained 1.53%.
China and Hong Kong stocks recovered as optimism over a summit between the top leaders from the world’s two largest economies later this week overrode lingering concerns over China’s economic health.
US Treasury Secretary Janet Yellen said on Friday that she agreed with Chinese Vice Premier He Lifeng to “intensify communication” on economic issues. The message came ahead of a scheduled meeting this week between US President Joe Biden and his Chinese counterpart Xi Jinping in San Francisco.
China’s blue-chip CSI300 Index was down 0.20% but the Shanghai Composite Index rose 0.25%, or 7.56 points, to 3,046.53. The Shenzhen Composite Index on China’s second exchange was ahead 0.56%, or 10.61 points, to 1,914.41.
Chinese developers listed in Hong Kong and China continued to sag, with ratings agency Moody’s warning that “China’s prolonged property market downturn will have adverse spillover effects amid slowing economy”.
China bank shares also fell, with index heavyweight Industrial and Commercial Bank of China (ICBC) dropping more than 1% in Shanghai following a ransomware attack on ICBC’s U.S unit.
The Hang Seng Index gained 1.30%, or 222.95 points, to 17,426.21.
Elsewhere across the region, in earlier trade, Taipei, Bangkok and Jakarta were up but Seoul, Sydney, Mumbai, Manila and Wellington retreated.
Dollar at One-Year High Against Yen
A tick up in US Treasury yields helped send the dollar to a fresh one-year high against the yen, while scuppering an early tech-led equity rally.
Benchmark 10-year Treasury yields pushed to a one-week high of 4.668%, testing the top of its range since soft non-farm payroll figures at the start of the month stoked bets for earlier Federal Reserve rate cuts.
The dollar climbed to 151.78 yen for the first time since mid-October of last year, despite being stable against the euro and sterling.
The week ahead is packed with big risk events, from consumer inflation and retail sales figures from the United States on Tuesday and Wednesday respectively, with Chinese retail sales also due Wednesday, following lacklustre sales growth at the annual Singles Day shopping festival over the weekend.
The marquee geopolitical event is also midweek, with the meeting between US President Joe Biden and Chinese leader Xi Jinping on the sidelines of an Asia-Pacific Economic Cooperation (APEC) summit in San Francisco.
Crude oil prices eased as demand worries trumped supply concerns, amid slowing growth in the United States and China.
Brent crude futures for January were down 71 cents, or 0.87%, at $80.72 a barrel, while the US West Texas Intermediate (WTI) crude futures for December were at $76.49, down 68 cents, or 0.88%.
Both benchmarks gained nearly 2% on Friday as Iraq voiced support for oil cuts by OPEC+.
Key figures
Tokyo – Nikkei 225 > UP 0.05% at 32,585.11 (close)
Hong Kong – Hang Seng Index > UP 1.30% at 17,426.21 (close)
Shanghai – Composite > UP 0.25% at 3,046.53 (close)
London – FTSE 100 > UP 0.75% at 7,415.44 (0934 GMT)
New York – Dow > UP 1.15% at 34,283.10 (Friday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Biden Keen to Resume Military Ties With China to Avoid Flare-ups
ICBC Relays Cash to US Unit, Orders Review into Cyber Attack
China’s E-Commerce Giants Say Sales up on Singles Day
Hang Seng, Nikkei Slide as Hawkish Fed Chief Dampens Mood
