Asian stocks start new quarter on front foot

TOKYO: Asian stocks began the new quarter on Monday with modest gains following a strong performance by global equities last week, while the dollar held steady ahead of key economic indicators.

MSCI’s broadest index of AsiaPacific shares outside Japan rose 0.15 per cent.

South Korea’s Kospi was flat and Japan’s Nikkei advanced 0.5 per cent. Shanghai was up 0.3 per cent.

Wall Street surged last Thursday as technology stocks rebounded, ending a tumultuous first quarter on a high note.

Many major financial centres were closed for the Good Friday Easter holiday. Markets in Australia, Hong Kong, Britain and Germany remained shut on Monday while the US market will resume trading.

MSCI’s world equity index ended up 1.2 per cent last week. But it lost about 1.5 per cent in the first quarter, pushed away from record highs as tensions over global trade escalated, turmoil in the White House deepened and marketleading technology firms wobbled on fears of regulation and other issues.

“We expect strong and broadbased growth to continue globally,” wrote strategists at Barclays.

But they warned that there were looming risks: “Trade protectionism, US economic policy uncertainty, concerns about higher cross-market volatility and risk premium in core rates markets call for a more tactical approach to risk assets.”

While last month’s fears of an all-out global trade war have abated somewhat, tensions between the United States and China over tit-for-tat tariffs kept investors on edge. China on Monday imposed tariffs on US products including frozen pork, wine and certain fruits and nuts in response to US duties on imports of aluminium and steel.

In currencies, the dollar was steady at 106.350 yen, while the euro was almost unchanged at $1.2317.

The greenback had gained about 0.6 per cent against a basket of six major currencies last week helped by a combination of factors including perceived progress on North Korea issues. The dollar index still lost more than 2 per cent last quarter, marking its fifth straight quarter of declines.

“A list of important indicators will be released this week, which could help steady market sentiment even though US-China trade concerns and other geopolitical risks continue to linger in the background,” said Koji Fukaya, president at FPG Securities in Tokyo.

US data due this week include Monday’s Institute for Supply Management (ISM) manufacturing index, Wednesday’s ISM non-manufacturing index and the non-farm payrolls report on Friday.

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