SINGAPORE: Asian stocks were set to end the week on a positive note, unscathed by a US trade probe on Chinese steel exports, while the euro remained on edge ahead of Sunday’s first round in a tight French presidential election after a shooting overnight in Paris that was claimed by Islamic State.
European stocks were headed for a more muted start, with financial spreadbetters expecting Britain’s FTSE 100 to open flat and Germany’s DAX to start the day up 0.1 per cent. France’s CAC 40 is also expected to be steady at the open, retaining most of Thursday’s 1.5 per cent gain, its biggest in more than seven weeks.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.5 per cent on Friday, taking its cue from Wall Street’s solid performance overnight on expectations of strong first-quarter earnings growth. It is still poised for a 0.4 per cent weekly loss.
Asian steelmakers were mostly steady or higher, as investors dismissed for now any negative impact from the launch of a US trade probe against Chinese steel exporters, although Chinese companies shed some of their earlier gains. The move sent their US counterparts surging over 8 per cent overnight.
China’s Angang Steel added 0.4 per cent, while Baoshan Iron and Steel Co, Beijing Shougang and Hesteel Co inched down between 0.1 per cent and 0.2 per cent.
The region’s other major steel producers posted strong gains, with Nippon Steel & Sumitomo Metal Corp jumping 1 per cent, and South Korea’s Posco surging 2.5 per cent, its biggest daily gain in more than three weeks.
Only 0.8 per cent of Chinese steel exports go to the US, according to a US Commerce Department report from December.
Markets also mostly shrugged off White House comments that the US may consider tit-for-tat tariffs on imports, and concerns raised by the International Monetary Fund that US tax cuts could fuel financial risk-taking and increase public debt.
Japan’s Nikkei advanced 0.8 per cent, on track for a weekly gain of 1.4 per cent.
Chinese shares in Shanghai added 0.1 per cent, set for a 2.2 per cent weekly drop, their worst since mid-December. Hong Kong stocks were little changed, heading for a 0.8 per cent loss for the week.
The first round of the French presidential election on Sunday kept the euro on edge though it traded largely flat on Friday, holding at $1.0717.
The common currency had hit a three-week high of $1.0778 on Thursday, but fell back after a policeman was shot dead in Paris and two others in an attack that was claimed by Islamic State.
Analysts feared the latest outrage could sway French voters in what is expected to be a tight election, by working against more moderate, centrist candidates.
The euro had made the earlier high thanks to opinion polls that showed French centrist Emmanuel Macron would easily beat far-right, anti-European Union candidate Marine Le Pen in the second round on May 7.
French 10-year Treasury yields slumped to a near-three-month low of 0.856 per cent on Thursday, while safe-haven German bund yields jumped to 0.244 per cent, their highest close in nearly two weeks.
Markets are awaiting several economic indicators from Europe later in the session, including Euro zone manufacturing and services data for April and British retail sales for March. US manufacturing and services data for April and existing home sales for March were due to be released later in the global day.
Wall Street indexes closed between 0.75 per cent and 0.9 per cent higher on rising expectations for first-quarter corporate profits. S&P 500 stock index company earnings now are expected to have gained 11.1 per cent in the first quarter.
The dollar was 0.1 per cent lower at 109.19 yen. It is up 0.6 per cent for the week.
The dollar index, which tracks the greenback against a basket of trade-weighted peers, was little changed at 99.806, on track to lose 0.75 per cent this week.
In commodities, oil drifted on Friday following Thursday’s choppy session as the tussle continued between worries over rising US production and optimism over comments from leading Gulf oil producers that an extension to Opec-led supply cuts was likely.
US oil was up 0.1 per cent at $50.74 a barrel, set for a weekly loss of 4.6 per cent, the most since the week ended March 10.
Global benchmark Brent was steady at $53.00, heading for a 5.2 per cent weekly loss, also its worst performance since March 10. — Reuters
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