SINGAPORE: Asian stocks were slightly higher on Friday after a sluggish start, while the dollar held most of the gains it made overnight on strong US economic data as some risk appetite returned despite caution over political turbulence in the United States.
European shares, which posted losses overnight, are on track for positive starts. Financial spreadbetter London Capital Group expects Britain’s FTSE 100 to rise 0.4 per cent, Germany’s DAX to climb 0.1 and France’s CAC 40 to gain 0.3 per cent on the open.
MSCI’s broadest index of Asia-Pacific shares outside Japan reversed earlier losses to gain 0.1 per cent, shrinking its weekly loss to 0.5 per cent.
Japan’s Nikkei rallied 0.1 per cent, but remains headed for a 1.8 per cent loss for the week. Australian shares slipped 0.25 per cent, widening weekly losses to almost 2 per cent.
Chinese shares were little changed, up 0.4 per cent for the week. Hong Kong’s Hang Seng jumped 0.3 per cent, set for a weekly rise of 0.1 per cent.
Malaysian shares advanced 0.2 per cent and the ringgit was almost 0.1 per cent higher at 4.323 per dollar, after first-quarter gross domestic product grew at 5.6 per cent from a year ago, the fastest pace in two years.
“The trend we have seen with Asian markets this morning has been one of mixed performances,” said Jingyi Pan, market strategist at IG in Singapore.
“While US markets managed to stage a moderate recovery with investors finding good entry points after the heavy sell-off, Asian investors are likely choosing to err on the cautious side, especially with multiple event-risks in the week ahead.”
These events include testimony by former FBI director James Comey at a Senate hearing and an Opec meeting in Vienna, she added.
US President Donald Trump’s dismissal of Comey last week set off a political firestorm that led to Wall Street’s biggest sell-off in over eight months on Wednesday after media reported that Comey had written a memo stating that Trump had asked him to drop a probe into his former national security adviser’s Russian connections.
On Thursday, Trump tersely denied the allegations and decried a “witch hunt” against him.
The Justice Department’s appointment on Wednesday of a special counsel to probe possible ties between Russia and Trump’s presidential campaign helped calm markets and lifted Wall Street on Thursday. The Dow gained 0.3 per cent, the S&P was up 0.4 per cent and the Nasdaq jumped 0.7 per cent overnight.
MSCI’s emerging markets index rose 0.1 per cent.
It slumped 2 per cent on Thursday, its biggest one-day loss since November. It was dragged down by an 8.8 per cent slump in Brazilian stocks, on a report President Michel Temer supported an attempt to bribe a potential witness to remain silent in the country’s biggest-ever graft probe.
The Brazilian real was fractionally weaker at 3.3685 per dollar on Friday, after plunging as much as 8.5 per cent to its lowest level since December on Thursday. The decline was the biggest since the currency was devalued in 1999 and wiped out all of this year’s gains.
Strong economic indicators from the US helped lift the dollar overnight. It edged back 0.1 per cent to 111.36 yen, but managed to retain most of Thursday’s gains. It is set for a 1.7 per cent fall over the week.
Data showed a sharp acceleration in factory activity in the mid-Atlantic region in May, and an unexpected drop in new applications for unemployment benefits.
The dollar index, which tracks the greenback against a basket of six major peers, was slightly lower at 97.793, after gaining 0.3 per cent on Thursday. It’s set to end the week 1.5 per cent lower.
Bitcoin hit a record high of 1,910 in Asian trade. The digital currency has more than doubled since March, driven by soaring demand for crypto-assets with the creation of new tokens to raise funding for start-ups using blockchain technology.
Sterling strengthened slightly to $1.295. On Thursday, it broke through $1.30 for the first time since September after news of better-than-expected British retail sales growth. But it fell back on technical selling and a stronger dollar to close 0.2 per cent lower. The euro also climbed 0.1 per cent to $1.111.It touched a six-month high on Thursday but surrendered the gains to close 0.5 per cent lower.
In commodities, oil prices continued their gains for the third straight session, set to post a 4 per cent weekly rise, on optimism that producers will agree to rein in output for longer.
US crude futures hit a three-week high, and were last trading up 0.8 per cent to $49.76 a barrel.
Global benchmark Brent was up 0.7 per cent at $52.89, near a four-week high hit earlier.
Gold inched higher, clawing back some of Thursday’s losses. Spot gold added 0.15 per cent to $1,248.62 an ounce, set to post a weekly gain of 1.6 per cent. — Reuters
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