Asian stocks firm, dollar weak as traders look to profit
- Chinese real estate stocks fall, onshore and HK benchmarks stable
- Nikkei down 0.7%, MSCI Asia ex-Japan up less than 0.1%
- Dollar at one-month low, oil and gold both gain
- Traders look to big U.S. tech companies and global bank earnings
HONG KONG, Oct. 25 (Reuters) – Asian equities posted recent gains on Monday ahead of a week filled with major quarterly earnings announcements, as the announcement of China’s property tax trials and lingering problems in the sector weighed on the markets of Hong Kong and mainland China.
The largest MSCI index of Asia-Pacific stocks outside of Japan (.MIAPJ0000PUS) was little changed – 0.07% higher – and still up 3.8% so far in October, while that the Nikkei of Japan (.N225) lost 0.7% on weaker profits of several local companies.
Futures indicated a solid opening in European markets, pan-regional Euro Stoxx 50 futures up 0.24% in early trades and FTSE futures up 0.26%.
US equity futures, the S&P 500 e-minis, gained 0.12%.
In Asia, the regional benchmark was dragged down by moderate performance in Chinese markets, with real estate companies weighing heavily.
Chinese blue chips (.CSI300) edged down 0.12%, and a real estate index (.CSI000952) lost 3%, while the Hong Kong benchmark (.HSI) traded flat despite a 3.4% drop in the Hong Kong listed mainland real estate index. companies (.HSMPI).
The drop in real estate stock follows an announcement on Saturday from the highest decision-making body of the Chinese parliament which will implement a pilot property tax in certain regions. Read more
Last week, ailing developer China Evergrande Group appeared to avoid a costly default with a last-minute coupon payment, and Reuters reported on Monday that some bondholders had received the payment. Read more
“Although we have had news on the Evergrande front, I think we will see more pressure on the real estate sector, especially the smaller ones,” said Carlos Casanova Asia, senior economist at UBP, highlighting the authorities’ efforts to correct house prices. and the expansion of pilot property tax plans at a time when many real estate companies had obligations falling due in the coming months.
Investors also have a series of expected corporate results in mind this week.
HSBC’s Hong Kong-listed stocks slashed earlier gains to be up 0.1%, even after Europe’s second-largest bank in terms of assets announced a surprise 74% rise in profits in the third trimester.
Facebook (FB.O) will release its quarterly results later Monday, with other benchmark heavyweights expected later in the week including tech giants Microsoft (MSFT.O), Apple (AAPL.O) and Alphabet. (GOOGL.O), and European and Asian financial giants Deutsche Bank (DBKGn.DE) and Lloyds (LLOY.L) to China Construction Bank and Nomura (8604.T).
The more risk-friendly mood that supported stocks weighed on safe-haven currencies, as did higher energy prices that supported currencies, particularly the Australian dollar and Canadian dollar.
The dollar index was last at 93.532, down 0.14% on the day, after hitting a one-month low of 93.483 earlier.
Traders await the third-quarter U.S. GDP figures expected on Thursday with a weak impression likely to weigh on the dollar, CBA analysts say, while expectations that rising inflation will lead to rate hikes. interest in the UK and Australia supported the pound sterling and the aussie. dollar.
Markets are still trying to position themselves for a widely expected cut in the US stimulus program this year and the possibility of rate hikes in late 2022
Federal Reserve Chairman Jerome Powell said on Friday that the US central bank is expected to begin the process of reducing its support for the economy by reducing its asset purchases, but is not yet expected to hit interest rates . Read more
As the decline looms, US benchmark yields have risen and 10-year Treasury yields hit a five-month high of 1.7064% last week. They were last 1.6449%.
Oil prices rose further on Monday as US crude hit a seven-year high as global supply remained tight amid strong global demand.
Brent crude rose 0.83% to $ 86.24 a barrel, while U.S. crude (.CLc1) rose 0.80% to $ 84.51
Spot gold rose 0.36% to $ 1,798 an ounce after posting gains over the past two weeks amid growing concerns about inflation and the weakening dollar.
Bitcoin, another asset often described as an inflation hedge, stood at $ 62,000, up 1.8% after turbulent trading last week when it hit a new high of $ 67,016 .
Editing by Stephen Coates and Lincoln Feast.
Our Standards: The Thomson Reuters Trust Principles.