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Asia stocks subdued after North Korea missile test

shares mixed

Syndicated News
Written by Syndicated News

SINGAPORE, July 31 2017 : Asian shares dipped today following a lackluster end to last week globally on some earnings disappointments, while the dollar edged up but remained capped by U.S. political uncertainty.

Investors stuck to perceived havens such as the Japanese yen and gold after North Korea conducted another missile test late on Friday that it said proved its ability to strike the U.S. mainland.

The U.S. responded by flying two bombers over the Korean peninsula yesterday.

Markets were also awaiting China’s official factory and service sector activity surveys due out at 0100 GMT and a flurry of other data globally later in the week.

The safe-haven Japanese yen strengthened about 0.2 percent to 110.42 yenJPY= to the dollar. Gold hit a 6 1/2-week high early today and was trading just a whisker below that level at $1,269.86 an ounce.

“The geopolitical overhang will likely keep top side moves in check early in the week as the disorganized U.S. and China policy towards North Korea is not helping matters,” Stephen Innes, head of Asia-Pacific trading at OANDA, wrote in a note.

The Korean won KRW= was little changed early today at 1,124.35 won to the dollar, after sliding almost 0.7 percent on Friday. South Korea’s KOSPI.KS11 fell 0.1 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent.

Japan’s Nikkei .N225 was little changed, with a firm yen offsetting data showing the country’s industrial output rebounded in June from a decline in May.

Australian shares advanced 0.2 percent.

On Wall Street on Friday, the S&P .SPX and Nasdaq .IXIC closed lower after earnings from companies including Amazon, Exxon Mobil (XOM.N) and Starbucks (SBUX.O) disappointed.

But the Dow .DJI closed higher and set an intraday record, lifted by Chevron’s (CVX.N) strong earnings.

U.S. corporate results overall have come in better than expected for the second quarter. More than halfway through reporting season, S&P 500 companies are on track to have increased earnings by 10.8 percent, according to Thomson Reuters.

The dollar index, which tracks the greenback against a basket of major peers, edged up about 0.1 percent to 93.361, after Friday’s 0.6 percent decline.

Markets are awaiting speeches by Cleveland Federal Reserve President Loretta Mester and San Francisco Fed President John Williams tomorrow for further insight into the Fed’s seemingly dovish monetary policy stance.

Investors will also be keeping a close eye on data including eurozone core inflation for July today; the Reserve Bank of Australia’s rate decision, at which it is expected to stay on hold, and U.S. manufacturing conditions, due tomorrow; the Reserve Bank of India’s meeting on Wednesday, at which it is expected to cut rates; and Bank of England on Thursday, when it is likely to leave rates unchanged.

A raft of private manufacturing surveys will also be released tomorrow.

The euro EUR=EBS was steady at $1.1742, following Friday’s 0.6 percent gain.

In commodities, oil prices rose for their sixth straight session on bigger-than-expected inventory drawdowns and signs that Saudi Arabia will reduce output further in August.

U.S. crude futures rose 0.1 percent to $49.75 a barrel, after earlier hitting $50.06, its first foray above $50 in two months.

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Syndicated News

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