Asian shares ride metals gains, stronger Wall Street

Wednesday, 23 August 2017 00:00 - - {{hitsCtrl.values.hits}}

TOKYO (Reuters): Asian shares rose on Tuesday after modest gains on Wall Street, while robust metals prices underpinned some regional markets even as investors remained wary ahead of the annual central banking conference in Jackson Hole later this week.

Futures suggested the brighter mood would carry through to Europe, with the Eurostoxx 50 up 0.4%, DAX futures up 0.5% and FTSE futures 0.4% higher.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7%.

On Wall Street on Monday, the Dow Jones Industrial Average and the S&P 500 marked modest gains, though the Nasdaq Composite .IXIC edged down slightly.

The Shanghai Composite Index advanced 0.1% while the blue-chip CSI300 index was up 0.2%.

The MSCI Asia ex-Japan materials index was 1% higher, buoyed by recent spot price gains.

The Australian stock market got a helping hand from strong gains for global mining giant BHP Billiton, which reported a surge in annual underlying profit to $6.7 billion on Tuesday.

Zinc CMZN3 edged down a day after hitting its highest since October 2007, while copper CMCU3 inched back toward its highest peak since November 2014 scaled on Monday. Nickel, used in stainless steel, crept slightly higher to log a fresh high for the year.

“Commodity prices are holding firm, particularly base metals,” and this has underpinned commodity-related currencies such as the Australian dollar, said Sue Trinh, head of Asia FX strategy at RBC Capital Markets in Hong Kong.

Nonetheless, Trinh cautioned that commodities have mostly firmed “on speculative Chinese investment flow from the wealth management industry, so we question the real demand.”

South Korean shares added 0.5%, despite lingering worries about tensions on the Korean peninsula.

The country’s forces began computer-simulated military exercises with the United States on Monday, which Pyongyang has denounced as a “reckless” step toward a nuclear war.

Australian shares rose 0.4%, while Japan’s Nikkei stock index finished down 0.1%.

The dollar steadied against its Japanese counterpart, after slumping to four-month lows last week, up 0.3% at 119.25.

The euro edged down 0.1% to $1.1801, but rose 0.2% to 128.92 yen.

“If you look at the corporate earnings side, it is quite encouraging, now that some export-related companies have decided to change their euro/yen assumptions from around 115 to 125 or so,” expecting the Japanese currency to trade stably against its European counterpart, said Akio Yoshino, chief economist at Amundi Japan Ltd.

The dollar index, which tracks the greenback against a basket of six major rivals, was up 0.1% to 93.218.