Japanese stocks rose on Monday morning as strong US data offset some of the worries over softness in Chinese economic indicators, while the yen’s inability to sustain its recent strength also helped underpin sentiment.
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In the currency market, the British pound rose 0.3 percent in early Asian trade to $1.4445 helped in part by the report that the “remain” camp held a 15-point lead over its “leave” rivals in Britain’s European Union referendum campaign.
KEEPING SCORE: In early trading, France’s CAC-40 was off 0.8 percent at 4,285.85 and Britain’s FTSE 100 declined 0.3 percent to 6,121.38. The yield on the 10-year Treasury note rose to 1.74 percent from 1.70 percent.
US consumers came back to stores in April, spending more than expected to reverse a worrisome stall in the first quarter of the year, US Commerce Department data showed on Friday, somewhat raising the possibility of another US interest rate hike, analysts said.
In other stocks making moves, Memorial Resource Development rose 41 cents, or 3 percent, to $13.86 per share after rival natural gas producer Range Resources said it would buy Memorial for $3.3 billion. Brent rose 0.1 percent to $47.89 a barrel after falling 0.5 percent on Friday.
US stocks rallied overnight as sharp gains in oil prices in the wake of a bullish report from Goldman Sachs and a rally in tech stocks outweighed weaker-than-expected regional manufacturing data. Output grew 3.8 percent from February instead of 3.6 percent estimated initially.
CHINESE WEAKNESS: A report over the weekend showed that industrial production growth in China slipped to a year-on-year rate of 6 percent in April from 6.8 percent the previous month, adding to fears of a slowdown in the world’s second-biggest economy. While the benchmark Shanghai Composite index dropped 7.18 points or 0.25 percent to 2,843.68, Hong Kong’s Hang Seng index rallied 234.85 points or 1.18 percent to finish at 20,118.80.
New data on Friday showed USA consumer spending jumped far quicker than expected in April, fuelling talk of another increase in interest rates. The Standard & Poor’s 500 index rose 17 points, or 0.9 percent, to 2,064. In addition to planned remarks from a raft of Fed officials, traders will also be monitoring Wednesday’s release of the minutes to the last meeting of the Fed policymakers. Benchmarks in Taiwan, Singapore and the Philippines advanced. Brent crude, which is used to price worldwide oils, added $1.05 to $48.88 per barrel in London.
Precious and industrial metals prices closed higher. Samsung Electronics rose 1.3 percent and S-Oil climbed 2.9 percent, while steelmaker POSCO lost 2.4 percent.
Japanese shares climbed as the yen nursed last session’s retreat against the dollar, with US crude holding around a six-month high and continued gains in industrial metals bolstering investors’ appetite for risk.
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Japan’s GDP was expected to have expanded at a scant, annualised rate of 0.2 percent in January-March, according to a Reuters poll, after a 1.1 percent contraction in October-December.
