Asia shares steady after solid China data
Asian shares were mixed yesterday but solid Chinese trade data helped China stocks outperform, while the yen stabilised after three days of decline as Japanese authorities hinted at the potential for currency intervention.
Europe looked set for a subdued open, with EUROSTOXX 50 futures flat, although the FTSE 100 was up 0.1 per cent ahead of an interest rate decision from the Bank of England later in the global day.
All eyes are on the prospects of a June rate cut following the overnight move by Sweden's Riksbank to cut rates, which underlined Europe's divergence from the US Federal Reserve as investors awaited US consumer inflation data due on Wednesday.
MSCI'S broadest index of Asia-pacific shares outside Japan slipped 0.2 per cent but was hovering not far from a 15-month high hit earlier in the week after Fed Chair Jerome Powell reiterated a stance for policy easing later this year.
Chinese customs data showed that imports jumped 8.4 per cent in April from a year earlier, beating expectations for a rise of 4.8 per cent, while exports returned to growth, meeting forecasts, in a boost to economic growth.
That helped Chinese shares build on earlier gains, with blue-chip stocks rising 0.9 per cent and Hong Kong's Hang Seng index increasing 1.2 per cent. News that China's eastern metropolis Hangzhou will lift all home purchases restrictions in the ailing property sector, a key pillar of do
For imports, strength was heavily concentrated in a few categories. The main theme in our view is the goal to compete in the AI race."
mestic demand, also boosted sentiment.
The fight against climate change and the widespread desire to decarbonise the economy has given an extraordinary boost to investments in renewable energy.
Property shares surged 2.5 per cent as a result.
"For imports, strength was heavily concentrated in a few categories. The main theme in our view is the goal to compete in the AI race," said Lynn Song, chief economist, Greater China, at ING, adding that imports of data-processing equipment and integrated circuits have been strong.
"Considering import demand could remain resilient but exports face a higher level of risk in coming months, we expect a smaller contribution from trade to (economic) growth starting in the second quarter."
In other markets, Japan's Nikkei reversed earlier gains to be off 0.2 per cent. Australia's resources-heavy share market lost 1.1 per cent while South Korea also retreated 1 per cent.
Nasdaq stock futures eased 0.2 per cent, dragged lower by Uber which fell 5.7 per cent overnight as the ride-sharing company issued a downbeat forecast after a surprise quarterly loss.
The Japanese yen steadied at 155.60 per dollar after falling for three sessions. It rose more than 3 per cent last week with market participants pointing to likely intervention by Japanese authorities twice to stem its fast decline.
Yesterday, Japan's top currency diplomat Masato Kanda said there is no limit for reserves in currency intervention, keeping traders on edge, while minutes from the Bank of Japan's April meeting showed policymakers turned overwhelmingly hawkish, helping the yen steady.
However, Japan's real wages in March fell 2.5 per cent from a year earlier, marking the second year of decline, an argument for policymakers to not hike aggressively.
In the Treasuries market, yields were little changed after edging up the day before, with movement likely to be muted ahead of the US inflation report next week. Two-year yields held at 4.8511 per cent, while the 10-year yield was at 4.5062 per cent, having risen three basis points overnight to 4.492 per cent.
Oil prices were higher yesterday, having bounced off two-month lows the previous session. Brent futures rose 0.4 per cent to US$83.91 a barrel, while US crude gained 0.5 per cent to $79.40 a barrel.
Gold prices were 0.3 per cent higher at $2,316.23 per ounce.