Asia stocks waver after China data, earnings in focus

Wednesday, 18 April 2018 01:14 -     - {{hitsCtrl.values.hits}}

TOKYO (Reuters): Asia stocks wavered on Tuesday after data showed both hot and cold patches in the Chinese economy, but losses were limited as investors turned their focus to corporate earnings from Syria.

Spreadbetters expected European stocks to open higher following overnight Wall Street gains, with Britain’s FTSE rising 0.15%, Germany’s DAX gaining 0.3% and France’s CAC climbing 0.3%.

The dollar was barely changed, with demand for safe-haven U.S. Treasuries ebbing as risk appetite improved in parts of the broader market as investors took the view that Western-led strikes on Syria were a one-off intervention.

China’s economy grew a welcome 6.8% in the first quarter of 2018 from a year earlier, official data showed on Tuesday, unchanged from the previous quarter.

But separate data showed March industrial output missed expectations and first-quarter fixed-asset investment growth slowed, tempering equity market gains.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.15%. South Korea’s KOSPI dipped 0.15% and Hong Kong’s Hang Seng was flat.

Shanghai’s index shed 0.35% and Japan’s Nikkei was unchanged. Australian stocks gained 0.3% with mining shares gaining on higher aluminium prices.

While Saturday’s missile strikes were the biggest intervention by Western countries against Syria, investor risk appetite improved on speculation that the attacks would not lead to prolonged conflict.

The Dow gained 0.87% and the S&P 500 rose 0.8% on Monday, with the biggest boosts from technology and healthcare sectors as investors were optimistic about the earnings season and appeared less worried about US-led missile attacks in Syria.

S&P 500 companies are expected to report an 18.6% jump in first-quarter profit, on average, the biggest rise in seven years, according to Thomson Reuters data.

The dollar index against a basket of six major currencies was little changed at 89.415 after losing 0.4% overnight.

The euro was steady at $1.2382. The dollar was effectively flat at 107.055 yen

The pound rose to $ 1.4355, its highest since June 2016, with focus on data that could cement expectations of a May interest rate increase from the Bank of England.

The Hong Kong Monetary Authority (HKMA) stepped into the currency market again on Tuesday, buying HK$ 5.77 billion ($ 735 million) in Hong Kong dollars as the local currency repeatedly hit the lower end of its allowable trading band.

The 10-year US Treasury note yield was at 2.834% after rising to 2.865 on Monday, its highest since 22 March.

US crude oil futures rose 0.5% to $ 66.57 a barrel after tumbling nearly 1.8% overnight as concerns over tensions in the Middle East waned.

Brent crude climbed 0.3% to $ 71.66 a barrel.

Aluminium hovered near seven-year highs reached the previous day after US sanctions on Russian producer Rusal stirred supply concerns.

Aluminium on the London Metal Exchange was at $ 2,386 per tonne after surging 5% to $ 2,403 on Monday, its highest since September 2011.