Asia stocks, dollar subdued after French vote relief
SINGAPORE: Asian stock markets edged down on Tuesday following a flat close on Wall Street, as investors searched for the next catalyst following France’s presidential election, while oil inched higher on expectations Opec supply cuts will be extended.
Financial spreadbetters expect Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 to all open flat.
The South Korean stock market, which finished at a record high on Monday, is closed for Tuesday’s presidential election.
Liberal Moon Jae-in expected to win the following months of is widely presidency, leadership vacuum after former President Park Geun-hye was removed on charges of bribery and abuse of power.
The polls opened at 6 am (2100 GMT on Monday) and will close at 8 pm (1100 GMT). The winner is expected to be sworn in on Wednesday after the Election Commission releases the official result.
Allies and neighbours are closely watching the election amid escalating tensions over North Korea’s accelerating development of weapons since it conducted its fourth nuclear test in January last year.
It conducted a fifth test in September and is believed ready for another. North Korea would be keen to see a Moon victory.
Its official Rodong Sinmun newspaper said in a commentary on Monday the time had come to put confrontation behind the Koreas by ending conservative rule in the South.
“South Korean markets had not registered significant risk-off sentiment similar to other economies pre-elections, and this is no surprise,” Jingyi Pan, market strategist at IG in Singapore, wrote in a note.
“The largely similar stance on policies by the Presidential candidates provides little chance of surprise as compared to last week’s French election.
Meanwhile, the filling of the political vacuum could go a long way to benefitting the economy.”
The Korean won weakened 0.25 per cent on Tuesday, with the dollar buying 1,135.52 won.
MSCI’s broadest index of AsiaPacific shares outside Japan slipped 0.2 per cent on Tuesday. Japan’s Nikkei was slightly lower. China’s CSI 300 index retreated 0.3 per cent in its sixth straight session of losses amid concerns over tighter financial regulations.
Hong Kong’s Hang Seng reversed earlier losses to trade up 0.35 per cent.
Taiwan stocks pulled back to trade 0.25 per cent lower on profit taking after earlier surpassing the 10,000-point mark to hit a two-year high.
The MSCI World index, which touched a record high overnight, dropped about 0.1 per cent. The dollar was flat at 113.285 yen, retaining most of Monday’s 0.4 per cent gain. The dollar index was also steady at 99.11.
The euro was steady at $1.0927 after tumbling 0.7 per cent on Monday.
“The euro’s retreat was driven solely by profit-taking. I think it is going to regain momentum over time,” said Yukio Ishizuki, senior currency analyst at Daiwa Securities.
French stocks slumped 0.9 per cent overnight, their biggest one-day loss in almost three weeks, as investors took profits following strong gains in the run-up to Sunday’s vote that saw the market favourite, centrist Emmanuel Macron, elected president.
Germany’s DAX closed 0.2 per cent lower, while Britain’s FTSE was marginally higher.
On Wall Street, all three major indexes closed flat, holding near recent all-time highs. The CBOE Volatility Index closed at 9.77, its lowest since December 1993.
Copper remained close to the four-month low touched on Monday after data showed a sharp drop on imports into China, the world’s biggest consumer.
London copper slipped 0.1 per cent to $5,481.50 a tonne on Tuesday, after falling to as low as $5,462.50 on Monday. Gold recovered from a sevenweek trough touched on Monday.
Spot gold rose about 0.1 per cent to $1,226.60 an ounce.