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Asia bourses higher despite declines for retailers

Monday 02:45 BST

Overview

Asian stocks were higher as investors put a choppy week of central bank meetings behind them, while the UK pound was under pressure after a “major incident” in London involving a van ploughing into pedestrians.

Hot topic

The S&P 500 ended last week up 0.1 per cent for the week but consumer staples, down 1 per cent, was the worst performing sector after Amazon announced the $13.7bn acquisition of Whole Foods, the upmarket US grocery chain.

In Asia, the potential impact of that deal was being felt most acutely in Australia, where staples stocks were down 1.1 per cent and the only sector in negative territory.

Woolworths and Wesfarmers, which enjoy a duopoly over the domestic supermarket sector, were down 3.1 per cent and 0.8 per cent, respectively.

Australia’s retail sector has been under pressure this year since Amazon announced it was setting up shop Down Under. While analysts thought this would hurt department stores and electronics retailers and leave supermarkets relatively untouched, the Whole Foods deal is prompting a reassessment of that view.

Discretionary retailers were hit again, with department store operator Myer down 2.5 per cent and electronics retailers Harvey Norman and JB Hi-Fi down 2.3 per cent and 1.5 per cent, respectively. Shares in shopping mall operators Westfield and Scentre Group were flat.

In Singapore, Jardine Matheson Holdings, whose subsidiaries include a supermarket operator, was down 1.2 per cent and one of only two stocks in the 30-member Straits Times index in negative territory on Monday.

Equities

Australia’s S&P/ASX 200 was up 0.5 per cent, thanks to positive performances from all sectors barring consumer staples. Singapore’s Straits Times index was up 0.6 per cent.

In Japan the broad Topix benchmark was up 0.6 per cent while in Hong Kong the Hang Seng index rose 0.8 per cent.

China’s Shanghai Composite was up 0.3 per cent while the tech-focused Shenzhen Composite added 0.1 per cent. Investors were turning their attention to a decision due on Tuesday by MSCI on whether to include China A-shares in its globally tracked emerging markets index.

Forex

The UK pound was down 0.1 per cent at $1.2769 and the weakest performer among major currencies on Monday. Sterling was rattled after London police said there were a number of casualties after a vehicle collided with pedestrians in the north London suburb of Finsbury Park.

The Japanese yen was 0.1 per cent weaker at ¥‎110.98 per dollar after data showing imports and exports grew by less than expected in May.

The dollar index, measuring the US currency against a basket of global peers, was flat, having pulled back in the wake of the Federal Reserve’s decision last week to raise interest rates.

Commodities

Oil prices were lower in Asia with Brent crude, the international benchmark, down 0.4 per cent at $47.18 a barrel and West Texas Intermediate off 0.4 per cent at $44.57.

Gold was 0.1 per cent weaker at $1,252.69 an ounce and on track for a fourth straight day of declines in the wake of the Fed’s decision to lift rates.

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