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Asia shares rise despite slide in energy stocks

Thursday 03.15 BST

Overview

Stock markets across Asia were broadly positive on Thursday in spite of energy stocks sliding on the back of lower oil prices, while sovereign bonds weakened and the dollar held on to Wednesday’s gains.

Hot topic

Equity markets throughout the region were climbing, although gains were tempered by losses from energy stocks on the back of a slide in crude prices on Wednesday. In Sydney, a 1.2 per cent drop by the energy segment offset gains in other sectors to leave the S&P/ASX 200 index up 0.3 per cent.

Tokyo’s Topix index rose 0.5 per cent as financials climbed 1.5 per cent but energy stocks dropped 1 per cent. Shares in Canon were up as much as 4.1 per cent following reports that the Japanese camera and imaging company’s operating profit was likely to have doubled in the first quarter.

Hong Kong’s Hang Seng index was up 0.4 per cent as energy shares dipped 0.6 per cent. Chinese tech company Tencent was up as much as 1.9 per cent despite news that the company was closing a function of its popular WeChat social network allowing users to tip content creators through their iPhones — a move the company said was made to comply with Apple policies on in-app purchases.

Forex

Currencies in the region were mostly softer in the face of a rising dollar. The dollar index — measuring the greenback against a basket of peers — was up 0.1 per cent after climbing 0.2 per cent on Wednesday.

South Korea’s won led losses among big Asian currencies, dropping 0.2 per cent to Won1,141.95 per dollar.

The UK pound — which earlier this week jumped 2.7 per cent to a five-month high against the greenback after the country’s prime minister called a surprise general election — was flat on Thursday at $1.2784.

Japan’s yen was 0.1 per cent weaker, pushing it just past the ¥109 per dollar mark after the currency firmed to be as strong as ¥108.66 on Wednesday. The yen is 7.3 per cent stronger against the dollar for the year-to-date.

The New Zealand dollar bucked the trend, climbing 0.4 per cent to $0.7034 following the release of data showing that consumer inflation reached the central bank’s target rate for the first time since 2011. The Australian dollar was a distant second with a 0.1 per cent gain on its US counterpart to $0.7505.

Fixed income

Government bonds were reversing course on Thursday, with US Treasuries enjoying a slight rebound as sovereign notes in the region lost across the board following gains earlier in the week.

The yield, which moves inversely to price, on 10-year Australian government bonds was up 5 basis points at 2.499 per cent, while that for the equivalent New Zealand note was up the same amount at 2.947 per cent. Yield on the 10-year Japanese government bond was up 1 bp at 0.005 per cent after dipping below zero on Wednesday for the first time since November.

Yield on 10-year US Treasuries was down 1bp at 2.204 per cent, pulling back after a rise of 5 bp the previous session.

Commodities

Crude prices were firmer after a fall on Wednesday prompted by a rise in US oil reserves. Brent crude, the international marker, was up 0.7 per cent at $53.28 a barrel after dropping 3.6 per cent the previous session. US marker West Texas Intermediate was up 0.6 per cent at $50.75 after closing down 3.8 per cent on Wednesday.

Gold was down 0.1 per cent at $1,279.17 after a drop of 0.7 per cent in Wednesday’s session in the face of a strengthening dollar.

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