Asia stocks steady after rally, focus back on fundamentals

TOKYO: Asian stocks steadied yesterday as investors paused for breath after the previous day’s rally, although tech-inspired Wall Street gains supported broader sentiment as focus shifted to bullish economic fundamentals, away from trade concerns.

Spreadbet ters expected European stocks to open flat to slightly lower, with Britain’s FTSE declining 0.2 per cent, Germany’s DAX little changed and France’s CAC slipping 0.2 per cent.

MSCI’s broadest index of AsiaPacific shares outside Japan was effectively flat after surging 1.4 per cent the previous day.

Japan’s Nikkei gained 0.2 per cent and South Korea’s KOSPI lost 0.1 per cent.

Hong Kong’s Hang Seng rose 0.15 per cent and the Shanghai Composite Index climbed 0.25 per cent after data showed China’s services sector expanded at a steady pace in May.

Wall Street’s three major indexes rose overnight, led by a rally in tech stocks, pushing the Nasdaq to a record closing high.

Friday’s better-than- expected May US employment report has helped revive investor optimism about the world’s biggest economy, shifting the focus away from recent trade tensions.

“S t rong US dat a put fundamentals back in the spotlight, just as Italian political concerns were ebbing,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

Italy’s anti- establishment parties formed a coalition government on Friday to end three months of deadlock and averting potentially destabilising snap elections.

“The next focal point is the upcoming FOMC (Federal Open Market Committee) meeting and whether the Fed shows any indication of accelerating the pace of its rate hikes following the strong employment report,” said Ichikawa. — Reuters