Asia Stocks Gain Even as Topix Swings, Yen Rises: Markets Wrap 

• U.S. currency slipped earlier on Fed official’s rates comment
• Chinese shares in Hong Kong resume rally; oil extends gains

Asian stocks rose as markets from Hong Kong to Singapore followed a rally in the U.S. The dollar pared earlier declines against the yen while oil rose for a fourth day.

The MSCI Asia Pacific Index climbed to the highest level since July 2015, with Chinese shares traded in Hong Kong resuming a rally. The dollar slipped against the yen early in the Asia trading day as Federal Reserve Bank of Cleveland President Loretta Mester said policy makers don’t want to surprise the market on interest rates. Oil extended gains above $54 a barrel. Australian debt held declines after the government’s biggest-ever bond sale.

Global equities are trading at the highest levels ever even as money managers are grappling with political uncertainty as the Fed prepares to lift interest rates again later this year. Expectations for a rate increase at the next policy meeting have been on the rise since Chair Janet Yellen indicated Feb. 14 that she foresees additional tightening this year regardless of whether President Donald Trump follows through on plans to pursue a pro-growth fiscal policy.

While French presidential elections and the U.K.’s Brexit plans present additional potential risks, investors have clung to optimism in global economic growth amid signs of an inflation pickup. Volatility gauges for equities around the world are trading near the lowest levels in more than a year.

Here are some events that investors are watching out for:

• The Fed releases minutes Wednesday from its most recent meeting, possibly giving investors a look into how members see Trump’s policies. Data should show the U.S. housing market perking up at the start of the year.
• It’s International Petroleum Week in London and top OPEC, government and company officials are attending.

Here are the main market moves:

Currencies

• The Bloomberg Dollar Spot Index rose 0.1 percent as of 3:50 p.m. in Tokyo, reversing an earlier drop of 0.1 percent.
• The yen rose 0.1 percent to 113.59 per dollar, paring an earlier gain of 0.3 percent. The Australian dollar and the British pound added 0.1 percent.
• Mester reiterated comments made on Feb. 20 that she would be “comfortable” with higher rates in response to rising price pressures, though she said the Fed was not yet “behind the curve” in addressing inflation.

Stocks

• The MSCI Asia Pacific Index rose 0.4 percent to the highest since July 2015. The Topix ended 0.1 percent higher, after swinging between gains of 0.3 percent and losses of as much as 0.2 percent.
• The Hang Seng Index jumped 0.8 percent. Hong Kong’s economic growth may accelerate this year after registering its slowest pace since 2012 last year, Financial Secretary Paul Chan said.
• The Hang Seng China Enterprises Index advanced 1 percent as banks and insurers rallied. Singapore’s Straits Times Index increased 0.7 percent.
• Futures on the S&P 500 rose 0.1 percent. The index added 0.6 percent Tuesday, with the Dow Jones Industrial Average, the Nasdaq Composite Index and the Russell 200 Index closing at all-time highs.
• Banking stocks in Europe fell 1 percent on Tuesday after HSBC missed earnings estimates and said it will boost cost-cutting measures and extend a stock buyback. The Stoxx Europe 600 index advanced 0.6 percent for a third straight gain that left it at the highest since December 2015.

Bonds

• The yield on 10-year Treasuries rose two basis points to 2.45 percent.
• Australian 10-year yields climbed three basis points to 2.83 percent. The government sold A$11 billion ($8.5 billion) of 11-year debt notes in its biggest-ever bond transaction, as investors hungry for higher yields set aside concerns stubborn budget deficits will cost the nation its AAA credit rating.

Commodities

• Oil rose 0.4 percent to $54.52 a barrel, adding to Tuesday’s 1.2 percent gain. Crude is extending its best rally since the end of December on increasing confidence that OPEC’s supply curbs will outweigh a gain in U.S. stockpiles.
• Gold fell 0.1 percent to $1,234.34, after alternating between gains and losses over the previous four sessions.
• Iron ore slipped 1 percent, after Tuesday’s 3.2 percent surge. Last year’s rally has extended into 2017, aided by rising steel prices and elevated demand for higher-grade ores, though some miners are flagging concerns that recent gains are probably overdone.

Source: Bloomberg

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