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Asia markets shake off Manchester attack

Tuesday 02:45 BST

Overview

Markets were trading cautiously as news of a suspected terror attack in Manchester offset an overnight advance by Wall Street that took US stocks close to a fresh record.

Hot topic

Just as nerves around last week’s political turmoil in Washington looked to be receding, investors were confronted with news of a suspected terror attack in Manchester late on Monday night in the UK. An explosion following a pop concert killed at least 19 people and injured about 50, according to local police.

The incident took place near the start of the Asian trading session and sparked some support for haven assets such as gold and the Japanese yen.

Gold was up 0.2 per cent at $1,262.68 an ounce, its highest level this month. The metal was buoyed last week as investors became more wary about the prospects of US president Donald Trump carrying out proposed reforms, such as tax cuts and infrastructure spending.

The Japanese yen, a popular asset in times of market stress, was 0.2 per cent firmer at ¥111.04 per dollar.

The UK pound was down 0.1 per cent at $1.299 on Tuesday and the worst performer among G10 currencies. Against the yen, sterling was 0.3 per cent weaker at ¥144.269.

Wall Street’s “fear index”, the Vix, closed below 11 points on Monday before the Manchester attack, having leapt to 15.6 last week. The retreat in volatility over the previous two sessions came as the S&P 500 rose 0.5 per cent on Monday to within 0.4 per cent of a record high.

Equities

Japan’s Topix was flat, as was Australia’s S&P/ASX 200, where declines in heavyweight financials, materials and energy sectors were offset by gains for the rest of the market.

Hong Kong’s Hang Seng edged up 0.1 per cent with market heavyweight Tencent rising 1.9 per cent to a record high.

China’s Shanghai Composite was down 0.3 per cent.

Shares in Noble Group tumbled as much as 31.6 per cent in Singapore before the commodities trader requested a trading halt. Standard & Poor’s late on Monday cut its credit rating on the company to CCC+ and warned of a default. Singapore’s Straits Times Index was up 0.3 per cent.

Forex

The dollar index, a measure of the US currency against a basket of global peers, was down 0.1 per cent at 96.914 in Asia.

With investors also increasingly suspecting the US Federal Reserve may not raise rates as aggressively as it previously hinted, the greenback was facing its eighth loss in nine sessions. It was trading at its lowest level since early November, meaning all the gains since the US presidential election have been erased.

Commodities

Oil prices were pulling back after almost a fortnight of solid gains. Brent crude, the international benchmark, was down 0.2 per cent at $53.74 a barrel while West Texas Intermediate was off 0.2 per cent at $51.04.

Iron ore futures in China were flat, while most base metal prices advanced in London on Monday.

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