Asia Stocks Diverge as China Rallies, Japan Slumps: Markets Wrap


(Bloomberg) — Asia stocks diverged as China shares rallied, while Japanese equities slumped on their first trading day of the year as investors caught up with a slew of negative news ranging from weak economic data to Apple Inc.’s sales outlook cut. U.S. stock futures climbed and the yen slipped after Thursday’s shock surge.

The Shanghai Composite Index climbed 1.8 percent. Concern over China-U.S. trade tensions eased as vice ministers from the two countries prepare to hold talks starting Monday. News that the U.S. House passed a spending-bill package in an effort to end a partial government shutdown also helped sentiment, sending S&P 500 Index futures higher. The yen, seen as a haven trade, slipped after it whipsawed on Thursday. While stocks pared losses in Japan, they were still well in the red as traders returned from an extended New Year’s break.

“I wouldn’t be surprised if we get better communication on trade,” said Stefan Hofer, chief investment strategist at LGT Bank. Still, “we have beginning-of-the-year jitters, low levels of liquidity and exaggerated swings, which feed people’s worst fears — which I simply can’t sign up to at the moment.”

Stocks across Asia earlier started the day on a weaker tone, following declines in New York. The S&P 500 slid 2.5 percent on Thursday in its steepest sell-off since Christmas Eve as Apple tumbled after citing an unforeseen slowdown in China. A measure of U.S. manufacturing plunged the most since October 2008.

Optimism for a resolution to the U.S. government shutdown and over trade talks eases two of the major overhangs that have dogged markets. The year kicked off with renewed anxiety over global growth following poor data from China and Europe.

In Japan, Apple suppliers Sharp Corp. and Kyocera Corp. slumped as they caught up with declines in global peers after the iPhone maker trimmed its sales outlook. Technology shares dropped the most among MSCI Asia Pacific Index’s industry groups, while energy and utility companies climbed.

Elsewhere, oil built on this week’s gains, heading for its biggest weekly gain since September. Traders weighed signs that OPEC is following through on production cuts against hints of an economic slowdown.

For more on the markets, you can go to our our Markets Live blog.

Here are some events investors may focus on in coming days:

The U.S. December jobs report is due FridayFed Chair Powell is interviewed with predecessors Janet Yellen and Ben Bernanke at the annual meeting of the American Economic Association Friday. Atlanta Fed President Raphael Bostic joins a panel on long-run macroeconomic performance.

And these are the main moves in markets:

Stocks

Japan’s Topix index fell 2 percent as of 12:50 p.m. in Tokyo, paring a drop of as much as 3.2 percent.China’s Shenzhen Composite Index climbed 2.2 percent, reversing an earlier loss of 1.2 percent.Hong Kong’s Hang Seng Index gained 1.3 percent.Australia’s S&P/ASX 200 Index slipped 0.7 percent. S&P 500 futures edged up 0.4 percent.

Currencies

The yen slipped 0.6 percent to 108.29 per dollar after rallying to the strongest in more than eight months.The Australian dollar advanced 0.3 percent to 0.7027.The Bloomberg Dollar Spot Index gained 0.1 percent.

Bonds

The yield on 10-year Treasuries rose 3 basis points to 2.58 percent after falling seven basis points on Thursday.Japan’s benchmark 10-year yield slipped 3 basis points to minus 0.037 percent.

Commodities

West Texas Intermediate crude rose 0.1 percent to $47.14 a barrel.Gold climbed 0.1 percent to $1,295.54 an ounce after reaching the highest in almost seven months.

–With assistance from Shingo Kawamoto and Gregor Stuart Hunter.

To contact the reporters on this story: Andreea Papuc in Sydney at apapuc1@bloomberg.net;Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Tan Hwee Ann, Teo Chian Wei

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.



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