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Asia stocks edge up after G7; summit, central bank meetings eyed(Update)


  • Markets
  • Monday, 11 Jun 2018

"The G7 meeting in Canada reiterated the growing rift between Washington and its allies over free trade," wrote Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan Asset Management.  "Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer," he said

"The G7 meeting in Canada reiterated the growing rift between Washington and its allies over free trade," wrote Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan Asset Management. "Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer," he said

TOKYO: Asia stocks shook off initial modest losses and edged up on Monday ahead of a U.S.-North Korea summit that might ease regional tensions, while investors also started to focus on key central bank meetings later this week.

Stocks dipped after U.S. President Donald Trump backed out of a joint Group of Seven communique over the weekend, in a blow to the group's efforts to show a united front.

The S&P 500 futures <ESc1> were down 0.1 percent after dropping as much as 0.3 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> slipped early but was last up 0.15 percent. Hong Kong's Hang Seng <.HSI> gained 0.3 percent while the Shanghai Composite Index <.SSEC> fell 0.5 percent.

South Korea's KOSPI <.KS11> added 0.4 percent, and Japan's Nikkei <.N225> climbed 0.3 percent.

"What took place at the G7 weekend was within the scope of earlier expectations. And while the countries disagreed on trade, they did seem to show a unified front on the North Korean issue, so there is also a positive element from the G7 affecting risk sentiment," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

After the G7 meeting, the U.S. president withdrew his support for its communique and raised fresh trade concerns by taking aim at Canadian Prime Minister Justin Trudeau amid a spat over import tariffs.

"The G7 meeting in Canada reiterated the growing rift between Washington and its allies over free trade," wrote Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan Asset Management.

"Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer," he said, adding that central bank meetings will be critical events this week.

Trump and North Korean leader Kim Jong Un will have an unprecedented meeting on Tuesday in Singapore, possibly laying the groundwork for ending a nuclear stand-off between the old foes.

Investors also got prepared for a raft of other key events.

The Federal Reserve holds a two-day meeting starting on June 12, and it is widely expected to raise interest rates for the second time this year. The focus is on whether the central bank will hint at raising rates a total of four times in 2018.

The European Central Bank meets on June 14, when it could signal intentions to start unwinding its massive bond purchasing programme.

On Monday, the dollar slipped against the yen, which often draws demand in times of market turmoil and political tensions.

The greenback was down 0.1 percent at 109.455 yen <JPY=>.

The Canadian dollar, which has been dogged by fears Trump may scrap the North American Free Trade Agreement (NAFTA), fell 0.25 percent to C$1.2959 <CAD=D4> per dollar.

The euro <EUR=>, which was lifted last week amid the prospect of the ECB signalling its exit from easy policy, was 0.25 percent higher at $1.1801 .

The dollar index against a basket of six major currencies was 0.15 percent lower at 93.410 <.DXY>.

Oil prices were mixed, caught between the downward pull of rising Russian production and U.S. oil drilling activity, and upward pressure from strong demand.

Brent crude futures <LCOc1> were up 0.1 percent at $76.55 a barrel. U.S. crude futures <CLc1. Slipped 0.15 percent to $65.66 a barrel.

Bitcoin <BTC=BTSP> struggled near two-month lows after South Korean cryptocurrency exchange Coinrail said it was hacked over the weekend, raising concerns about security at small- to mid-sized virtual currency exchanges.

 Earlier report:

Asia stocks wobble after G7; Trump-Kim summit, central bank meetings eyed

TOKYO: Asian stocks moved gingerly on Monday as a weekend G7 summit fanned trade conflict fears after U.S. President Donald Trump backed out of a joint communique in a blow to the group's efforts to show a united front.

Trump's reversal, announced while he was en route to Singapore for a meeting with North Korean leader Kim Jong Un, sent his Group of Seven partners scrambling.

"The G7 meeting in Canada reiterated the growing rift between Washington and its allies over free trade," wrote Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan Asset Management.

"Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer," he said, adding that central bank meetings will be critical events this week.

The S&P 500 futures <ESc1> were down 0.17 percent. Japan's Nikkei <.N225> dipped 0.1 percent while South Korea's KOSPI <.KS11> added 0.2 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> inched up 0.05 percent.

The G7 jolt came shortly before an unprecedented meeting between Trump and North Korea's Kim on Tuesday in Singapore, and with investors also braced for a raft of other key events.

The Federal Reserve holds a two-day meeting starting on June 12, and it is widely expected to raise interest rates for the second time this year. The focus is on whether the central bank will hint at raising rates a total of four times in 2018.

The European Central Bank meets on June 14 and it could signal intentions to start unwinding its massive bond purchasing program.

On Monday morning, the dollar slipped against the yen, which often draws demand in times of market turmoil and political tensions.

The greenback was down 0.15 percent at 109.420 yen <JPY=>.

The Canadian dollar, which has been dogged by fears Trump may scrap the North American Free Trade Agreement (NAFTA), fell 0.35 percent to C$1.2975 <CAD=D4> per dollar.

The euro <EUR=>, which was lifted last week amid the prospect of the ECB signaling its exit from easy policy, was 0.1 percent higher at $1.1782 .

The dollar index against a basket of six major currencies was a shade lower at 93.500 <.DXY>.

Crude oil prices extended losses after retreating on Friday on concerns about surging U.S. output and falling demand in China.

Brent crude futures <LCOc1> were down 0.1 percent at $76.38 a barrel. - Reuters

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