Tuesday, 7 August 2018
- Asian stocks were narrowly mixed on Tuesday.
- The dollar was supported by trade uncertainty while the British pound weakened on Brexit news.
- The Reserve Bank of Australia is due to announce its rates decision later today.
Asian stocks were narrowly mixed early on Tuesday after markets in the region pared early gains in the last session amid U.S.-China trade jitters after Beijing threatened retaliation last week.
Japanese shares edged higher, with the benchmark Nikkei 225 adding 0.28 percent. The broader Topix traded up 0.14 percent. South Korea’s Kospi, meanwhile, drifted higher by 0.05 percent in early trade. Australian shares eased ahead of the Reserve Bank of Australia’s interest rate decision due. The S&P/ASX 200 slipped 0.12 percent.
The mixed showing in Asia came after U.S. stocks rose on Monday as investors shrugged off trade uncertainty and focused instead on corporate earnings news. The Nasdaq Composite gained 0.61 percent to finish the session at 7,859.68, recording a five-day winning streak which was its longest since May. The Dow Jones Industrial Average edged up by 0.16 percent, or 39.60 points, to close at 25,502.1 and the S&P 500 was up 0.35 percent to 2,850.40.
That compared to slightly more downbeat sessions seen in Asia and Europe on Monday after China last week said it was preparing to impose duties, ranging from 5 percent to 25 percent, on around $60 billion in U.S. imports. Beijing said those tariffs would take effect if the U.S. went ahead with imposing more duties on Chinese goods.
Both the Shanghai and Shenzhen Composite were in bear market territory at the end of Monday, with the benchmark Shanghai share average closing down 1.26 percent in the previous session as trade uncertainty dampened investor sentiment.
Those trade tensions gave support to the dollar, which broadly firmed overnight. The dollar index, which tracks the dollar against a basket of currencies, held onto Monday’s gains to last trade at 95.337. The People’s Bank of China (PBOC) set the yuan reference rate at 6.8431 vs previous day’s close of 6.8519.
Oil markets started cautiously on Tuesday, as many traders in Asia were reluctant to take on new positions ahead of the introduction of U.S. sanctions against major crude exporter Iran. Spot Brent crude oil futures LCOc1 were at $73.74 per barrel at 0100 GMT on Tuesday, down 1 cent from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 8 cents at $68.93 barrel.
Source : Reuters