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Asian Markets Rise Amid Improved Risk Appetite

Asian-Markets1_10Sep17.jpg

Asian stock markets are rising on Monday amid improved risk appetite on reduced expectations of another interest rate hike by the U.S. Federal Reserve and as North Korea did not conduct a missile test over the weekend despite speculation that it would do so.

Meanwhile, investors are digesting the impact of Hurricane Irma, which has cut off power to 2 million people in Florida as it crept up the state's west coast. However, it has weakened to a Category 2 storm.

The Australian market is advancing despite the mostly negative cues from Wall Street, as gains by banks and oil stocks more than offset weakness in mining stocks.

In late-morning trades, the benchmark S&P/ASX 200 Index is rising 26.50 points or 0.47 percent to 5,699.10, off a high of 5,703.10 earlier. The broader All Ordinaries Index is up 24.60 points or 0.43 percent to 5,764.00.

In the banking sector, Westpac, Commonwealth Bank, National Australia Bank and ANZ Banking are higher in a range of 0.8 percent to 1.2 percent.

Macquarie Group said it expects stronger performance fees to lift its results for the first half of fiscal 2018, but anticipates full-year performance will be in line with 2017. The bank's shares are rising more than 2 percent.

Oil stocks are also mostly higher despite a more than 3 percent fall in crude oil prices Friday. Santos is rising 0.4 percent and Oil Search is adding 0.7 percent, while Woodside Petroleum is down 0.4 percent.

Origin Energy will buy a 27.77 percent stake in the Otway gas project and minority interests in exploration joint ventures from oil and gas explorer Benaris for A$190 million. Origin Energy's shares are adding 0.5 percent.

In the mining space, BHP Billiton and Rio Tinto are losing more than 2 percent each, while Fortescue Metals is declining almost 3 percent as base metal prices tumbled.

Gold miners are also weak. Newcrest Mining is declining 3 percent and Evolution Mining is down more than 2 percent.

Tabcorp expects to complete its A$11 billion merger with rival Tatts Group on November 1. Shares of Tabcorp are advancing more than 1 percent.

In the currency market, the Australian dollar is lower against the U.S. dollar on Monday. In early trades, the local unit was trading at US$0.8050, down from US$0.8100 on Friday.

The Japanese market is notably higher as the U.S. dollar rebounded against the yen and Japan's July core machinery orders data beat expectations. Risk appetite was also boosted after North Korea did not conduct a missile test over the weekend despite speculation that it would do so.

In late-morning trades, the benchmark Nikkei 225 Index is rising 286.64 points or 1.49 percent to 19,561.46, off a high of 19,567.03 earlier.

Among the major exporters, Sony is rising more than 3 percent, Mitsubishi Electric is advancing more than 2 percent, Canon is up more than 1 percent and Panasonic is adding almost 1 percent.

Among automakers, Toyota is adding more than 1 percent and Honda is advancing almost 2 percent. In the banking sector, Mitsubishi UFJ Financial is gaining almost 2 percent and Sumitomo Mitsui Financial is adding more than 1 percent.

In the oil space, Inpex is declining 0.3 percent, while Japan Petroleum Exploration is adding 0.2 percent.

Among the best performers, Maruha Nichiro is rising more than 5 percent, while Trend Micro and Yaskawa Electric are gaining almost 5 percent each.

In economic news, the Cabinet Office said on Monday that core machine orders in Japan surged a seasonally adjusted 8.0 percent on month in July, standing at 853.3 billion yen. That beat forecasts for an increase of 4.1 percent following the 1.9 percent decline in June.

The Bank of Japan said that the M2 money stock in Japan was up 4.0 percent on year in August, coming in at 978.0 trillion yen. That was unchanged from the July reading, although it was shy of estimates for a gain of 4.1 percent.

In the currency market, the U.S. dollar is trading in the mid 108 yen-range on Monday.

Elsewhere in Asia, Shanghai, South Korea, Singapore, Hong Kong, New Zealand, Indonesia and Malaysia are also higher, while Taiwan is declining.

On Wall Street, stocks closed mostly lower on Friday amid concerns about the economic impact of Hurricane Irma and worries about North Korea, which is celebrating a holiday on Saturday that could be a key date for another intercontinental ballistic missile launch.

While the Dow inched up 13.01 points or 0.1 percent to 21,797.79, the Nasdaq fell 37.68 points or 0.6 percent to 6,360.19 and the S&P 500 dipped 3.67 points or 0.2 percent to 2,461.43.

The major European markets also ended mixed on Friday. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index closed just below the unchanged line and the U.K.'s FTSE 100 Index fell by 0.3 percent.

Crude oil futures fell Friday, but held onto weekly gains as industry data showed the U.S. oil rig count dropped for a third week in four. WTI crude for October delivery plunged $1.61 or 3.28 percent to $47.48 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

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