Asia Stocks Mixed After U.S. Gains; Brazil Roiled: Markets Wrap – Bloomberg

Asian stocks were mixed after U.S. stocks rebounded with the dollar. Caution remained in financial markets as a government crisis in Brazil raised the specter of emerging-market risk.

Japanese stocks were little changed as the yen headed for its strongest week in a month, while Australia shares slipped. The S&P 500 Index clawed back part of the biggest selloff in eight months spurred by turmoil in U.S. President Donald Trump’s administration. Brazil’s currency, shares and bonds tumbled amid calls for the country’s leader to resign over an alleged cover-up.

Financial markets in the U.S. stabilized as the administration sought to move past controversies surrounding Russia that have threatened to ensnare its plans for tax cuts and infrastructure spending. Risk sentiment was also helped by better-than-expected U.S. jobless claims and regional manufacturing data.

Despite the rebound in the U.S., investors remain on alert. Wall Street has become more sensitive to Washington headlines as concerns grow over the strength of the global economy at a time when the Federal Reserve is considering further rate increases. The political upheavals were seen by some traders as a catalyst after global shares traded at an all-time high as recently as Tuesday.

“While investors will be relieved that yesterday’s selling looks unlikely to be repeated today, it’s too early to assume yesterday was a one-day wonder,” Ric Spooner, a market strategist at CMC Markets, wrote in a note. “Markets have clearly decided that the US political situation has the potential to knock stock valuations off their relatively high perch.”

Read our Markets Live blog here.

What investors will be watching:

  • Federal Reserve Bank of St. Louis President James Bullard speaks to the Association for Corporate Growth at Washington University’s Knight Center in St. Louis.
  • The economic calendar is thin on Friday, with Malaysian GDP on tap in Asia.
  • Trump’s first foreign trip as president will be to Riyadh on Saturday, at the invitation of Saudi King Salman bin Abdulaziz. After Saudi Arabia, Trump visits Tel Aviv and Rome before heading to a NATO summit in Brussels and the G-7 meeting in Sicily.

Here are the major moves in the markets:

Stocks

  • Japan’s Topix index increased 0.1 percent as of 9:28 a.m. in Tokyo, after dropping 1.3 percent on Thursday. The gauge is heading for a loss of 1.6 percent for the week.
  • Australia’s S&P/ASX 200 Index fell 0.3 percent and South Korea’s Kospi was flat.
  • S&P 500 futures added less than 0.1 percent. The benchmark index rose 0.4 percent on Thursday after plunging 1.8 percent in the previous session, its worst day since Sept. 9. The Stoxx Europe 600 Index declined 0.5 percent, paring a drop that reached 1.2 percent.
  • Brazil’s Ibovespa Index tumbled 8.8 percent on Thursday, the most since October 2008, as political crisis returned to the country after last year’s impeachment process.

Currencies

  • The Bloomberg Dollar Spot Index was steady after increasing 0.3 percent Thursday, reversing some of the selloff that took it to its lowest level since the U.S. election. The gauge is down 1 percent for the week.
  • The yen rose 0.1 percent to 111.38 per dollar after falling 0.6 percent on Thursday. The currency is up 1.7 percent for the week, its strongest performance in a month.
  • The euro rose less than 0.1 percent to $1.1111 after dropping 0.5 percent in the previous session. The pound rose 0.2 percent to $1.2957 after briefly jumping above $1.30 on Thursday.
  • Brazil’s real led declines among emerging-market currencies, slumping 7.5 percent on Thursday. The Mexican peso ended down 0.3 percent, paring an earlier drop of as much as 2.2 percent after the central bank unexpectedly raised its key interest rate.

Bonds

  • The yield on 10-year Treasuries was flat. It ended Thursday little changed at 2.23 percent after earlier sliding to as low as 2.18 percent.
  • Bonds of Brazil’s state-controlled energy company Petroleo Brasileiro SA dropped by the most in six months amid the nation’s political crisis.

Commodities

  • Gold rose 0.2 percent to $1,249.03 an ounce after it fell 1.1 percent on Thursday to reverse part of its five-day rally. The metal is up 1.6 percent this week.
  • West Texas crude rose 0.2 percent to $49.46 as OPEC members supported Saudi Arabian and Russian pledges to extend supply cuts. Oil is up 3.3 percent for the past five days, heading for a second weekly gain.

    Asia Stocks Mixed After U.S. Gains; Brazil Roiled: Markets Wrap – Bloomberg}

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