Asia stocks shake off Wall St blues, sterling steady

SINGAPORE: Asian stocks rose on Monday, shaking off Wall Street’s subdued performance on Friday, and sterling was steady after a van rammed into worshippers leaving a London mosque, killing at least one person, as markets braced for the start of Brexit talks.
European stock markets were set for a strong start to the week, with financial spreadbetter CMC Markets expecting Britain’s FTSE 100 to open 0.6 per cent higher, France’s CAC 40 to be up 0.3 per cent and Germany’s DAX 0.2 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent.
Japan’s Nikkei climbed 0.6 per cent.
Australian shares added 0.3 per cent and South Korea’s KOSPI rose 0.4 per cent. Chinese blue-chip shares advanced 0.8 per cent on signs tight liquidity conditions were easing.
Data showing home prices rose 10.4 per cent in May from a year ago, although slowing from April’s 10.7 per cent gain, helped boost real estate stocks. Hong Kong’s Hang Seng gained 0.9 per cent.
“Generally, the environment still remains fairly positive for risk appetite,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group in Singapore.
“Now that the (Federal Reserve interest rate decision) is out of the way, the focus, for this region anyway, will remain on whether the economic environment will stay positive and the recovery will continue.”
On Friday, Wall Street ended mixed, with energy names offsetting declines in consumer stocks, which were clobbered by Amazon.com’s $13.7 billion deal to buy upscale grocer Whole Foods Market.
The S&P 500 index closed flat, the Dow Jones Industrial Average ended up 0.1 per cent and the Nasdaq lost 0.2 per cent.
Europe had a more upbeat session on Friday, with British , German and French stocks, as well as the broader STOXX Europe 600, closing higher.
The British pound was flat at $1.2777 after a van rammed into worshippers as they were leaving a Finsbury Park mosque in North London early on Monday.
Police said one man had been pronounced dead and 10 people were injured. The van driver has been arrested.
British Prime Minister Theresa May said police confirmed the incident was being treated as a potential terrorist attack.
Brexit Secretary David Davis starts negotiations in Brussels on Monday, which will be followed by a Brussels summit on Thursday and Friday where May will encounter — but not negotiate with — fellow European Union leaders.
Davis’s agreement to Monday’s agenda led some EU officials to believe that May’s government may at last be coming around to Brussels’ view of how negotiations should be run for Britain’s exit from the EU.
May’s own immediate political survival is in doubt after she lost her parliamentary majority in an election.
Projections showing a strong parliamentary majority for French President Emmanuel Macron following Sunday’s vote, giving him a powerful mandate to push through pro-business reforms, lent support to the euro.
The common currency was steady at $1.1195, retaining Friday’s 0.5 per cent gain. The dollar was little changed on Monday.
On Friday, it fell after US homebuilding dropped for a third month in May to the lowest in eight months and a barometer of US consumer sentiment unexpectedly fell in early June, prompting concerns about the Federal Reserve’s plans to stick with its monetary policy tightening.
The dollar index, which tracks the greenback against a basket of six global peers, was little changed at 97.182, failing to make up any of Friday’s 0.3 per cent loss.
The market is awaiting comments by New York Fed President William Dudley, a close ally of Fed Chair Janet Yellen, when he speaks at a business roundtable in New York state.
“In the wake of Friday’s weak US data, Dudley could provide insight into whether the Fed is still poised to continue normalising monetary policy,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.— Reuters