Asia stocks edge up on tech shares, US inflation data awaited

TOKYO: Asian stocks edged up yesterday with technology shares buoyed by gains in their Wall Street peers, but gains were limited ahead of US inflation data later in the day which could offer clues on the pace of interest rate rises this year.

Spreadbetters expected a slightly lower start for European stocks, with Britain’s FTSE dipping 0.1 per cent, Germany’s DAX inching down 0.05 per cent and France’s CAC shedding 0.07 per cent.

MSCI’s broadest index of AsiaPacific shares outside Japan was up 0.2 per cent after spending much of the day swerving in and out of negative territory.

The index had surged 1.5 per cent on Monday following firm US jobs numbers on Friday, while low wage growth eased concerns about inflation and faster central bank rate hikes. But a mixed performance by US shares overnight tempered the rally.

The S& P 500 and the Dow slipped on Monday as the US tariffs signed into law last week weighed on industrials, while a rise in tech stocks boosted the Nasdaq to a new record high.

Japan’s Nikkei recouped earlier losses and rose 0.7 per cent, with gains in chip-related technology shares helping offset losses in steelmakers and automakers still weighed by concerns about US tariffs on imported steel and aluminium. Shanghai dipped 0.1 per cent. Tech- heavy South Korean and Taiwan shares advanced 0.15 per cent and 0.85 per cent, respectively.

“Concerns towards trade conflict stemming from US tariffs continue to linger in the background, capping risk appetite, pushing Treasury yields lower which in turn weighing on the dollar,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“That said, there are still bright spots that bode well for broader risk sentiment, as the Nasdaq’s gains shows.”

Separately, US President Donald Trump on Monday blocked Singapore-based semiconductor maker Broadcom Ltd’s takeover bid of Qualcomm Inc on grounds of national security, ending what would have been the technology industry’s biggest deal ever.

The dollar index against a basket of six major currencies rose 0.1 per cent to 89.999 after shedding about 0.2 per cent overnight.

The euro was little changed at US$1.2329 after gaining 0.25 per cent overnight.

The US currency was up 0.3 per cent at 106.740 yen, trimming some losses after a suspected cover-up of a cronyism scandal put Japanese Premier Shinzo Abe and his close ally, Finance Minister Taro Aso, under fresh pressure.

Although such doubts have lent support to the yen, the concerns over Japanese political risks have had a relatively minor effect on wider markets so far, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore. — Reuters