Asian stocks outside Japan rebounded as China’s trade expanded, while the U.S. oil benchmark-contract slipped toward a record losing streak. European index futures were flat and gold was near a 3 1/2-month high.

The MSCI Asia Pacific excluding Japan Index, which dropped the most since April 25 yesterday, added 0.3 percent by 7:09 a.m. in London. The Hang Seng Index climbed 0.3 percent after a 1.6 percent plunge yesterday. West Texas Intermediate crude fell a 10th day, the longest slump since trading began in 1983. Standard & Poor’s 500 Index futures fell 0.1 percent while contracts on the Euro Stoxx 50 Index were little changed. Gold added 0.2 percent. The rupiah climbed and stocks in Jakarta hit the highest in a year as unofficial counts showed the city’s Governor Joko Widodo won the presidency.

Chinese exports rose a less-than-forecast 7.2 percent in June, while the trade surplus came in more than $5 billion below economists’ estimate of $36.95 billion, which would have been the highest since January 2009. U.S. data showed crude supplies rose last week, while demand for gasoline ebbed, exacerbating declines in oil fueled by waning concern over the Iraq conflict and signs Libya will boost shipments. The Bank of England decides rates before a U.S. jobless claims report.

“It’s still consistent with a stabilization in Chinese growth, albeit not quite as strong as one would have liked to have seen,” Shane Oliver, a Sydney-based global strategist at AMP Capital Investors Ltd., which oversees about $131 billion, said by phone. “The bear case on China has been way overstated and this data would support the view that growth is stabilizing not collapsing.”

Hang Seng

About two stocks rose for each that fell on the Hang Seng Index, which yesterday erased its gain for the year. A gauge of Chinese companies listed in the city added 0.3 percent. The Hong Kong Monetary Authority intervened overnight to protect the peg against the dollar, injecting HK$4.534 billion ($585 million) into the banking system to prevent the currency from rising beyond its permitted range.

China’s overseas shipments fell short of the 10.4 percent expansion that was the median of 47 economists’ estimates compiled by Bloomberg. Imports grew by 5.5 percent in June, also falling short of the 6 percent increase projected. The trade surplus fell to $31.6 billion for June, from $35.92 in May. Data yesterday showed producer prices fell last month at the slowest pace in more than two years.

Economic growth is still too weak in China to halt intervention in the yuan and capital flows aren’t steady enough to warrant changes to the way the currency is managed, Lou Jiwei, the country’s finance minister, told reporters yesterday in Beijing amid economic talks with the U.S. Treasury Secretary Jacob J. Lew said moving to a market-determined yuan exchange rate will be a “crucial step” in helping drive China’s growth.

Cushing Inventories

“Extreme cautiousness towards China’s economy has receded overall, with the government showing signs it will step in to support growth when needed,” said Mari Oshidari, a Hong Kong-based strategist at Okasan Securities Group Inc.

WTI traded at $101.80. Brent crude dropped 0.1 percent to $108.13 a barrel in its ninth day of declines, the longest retreat since 2010, data compiled by Bloomberg show. The U.S. Energy Information Administration said that oil stockpiles at Cushing, the delivery point for WTI, rose by 447,000 barrels last week.

Gold traded at $1,330.90, less than $2 from its July 1 intraday top of $1,332.33 that was the highest level since March 24.

Corn, Topix

Corn held below $4 a bushel and soybeans headed for the longest slump since 1981.

Corn for December delivery lost as much as 0.7 percent to $3.9525 a bushel on the Chicago Board of Trade and was at $3.955. Prices fell to $3.95 yesterday, the lowest for a most-active contract since July 2010.

Japan’s Topix fell 0.9 percent, extending its drop into a fourth day after a report showed orders of machinery in May fell by 14.3 percent from a year earlier. Economists had predicted a 10.1 percent increase. The yen climbed 0.1 percent to 101.54 per dollar.

Australia’s S&P/ASX 200 Index rose 0.3 percent. The local dollar dropped 0.1 percent 94.01 U.S. cents, reversing an earlier advance. Data showed the economy created more jobs than estimated even as the unemployment rate climbed to match the highest in a decade. China is Australia’s largest trading partner.

The Kospi index in Seoul climbed 0.2 percent. The yield on South Korea’s 10-year bonds dropped 8 basis points after the Bank of Korea cut its growth outlook and kept its seven-day repurchase rate at 2.5 percent today.

Fed Minutes

In the U.S. yesterday, minutes of the Federal Reserve’s June 17-18 meeting showed policy makers were concerned investors were becoming too complacent over the economic outlook and risk taking.

While policy makers agreed their asset-purchase program would end with a final cut of $15 billion at their October meeting should the economy progress as expected, they noted that “monetary policy needed to continue to promote the favorable financial conditions required to support the economic expansion.”

The S&P 500 (SPX) rose for the first day this week, closing at 1,972.83, while yields on two-year Treasury notes dropped three basis points, or 0.03 percentage point, to a one-week low of 0.48 percent in New York.

Indonesia Poll

The Jakarta Composite Index added 2 percent to 5,127.21, heading for its highest close since May 2013, as financial companies such as PT Bank Rakyat Indonesia led the advance. The gauge rose as much as 2.8 percent earlier, while a U.S.-listed exchange-traded fund jumped 4 percent overnight. The rupiah gained 0.7 percent to 11,555 per dollar, according to prices from local banks, after touching the strongest level since May 22.

Both Widodo, known as Jokowi, and his opponent Prabowo Subianto claimed victory in yesterday’s presidential vote. Jokowi had about a five percentage point lead in the poll, according to unofficial counts from two survey companies that declared him the winner. Official results aren’t due for about two weeks. Bank Indonesia will probably hold its reference rate at 7.5 percent today, according to the median of 21 estimates from economists surveyed by Bloomberg.

 

Source: Bloomberg

 

---