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Asia stocks soft after drop in US markets and oil prices

Tuesday 03:55 BST

Overview

Asian markets were broadly weaker after Wall Street slipped overnight and oil prices fell, while the UK pound was gaining some ground ahead of Thursday’s general election.

Hot topic

Australia’s S&P/ASX 200 was down 1 per cent with the materials and financial sectors both down more than 0.7 per cent.

Japan’s Topix index was off 0.6 per cent. Toshiba and Kirin were among the best performing blue-chips. Toshiba rose as much as 4.2 per cent amid reports it is considering giving US chipmaker Broadcom exclusive rights to buy its chip unit. Brewer Kirin was up as much as 5 per cent amid higher analyst expectations for its investment in Myanmar Brewery as the country’s economy grows.

The S&P 500 closed 0.1 per cent lower on Monday to 2,436, retreating from a record closing high on Friday.

Hong Kong’s Hang Seng Index was up 0.4 per cent as all sectors excluding energy rose. Shares in Chinese developer Evergrande jumped as much as 9.2 per cent to a record high after it announced plans to redeem all of its remaining perpetual bonds by the end of June.

China’s Shanghai Composite was flat while the Shenzhen Composite was up 0.3 per cent.

Forex

The Australian dollar was 0.2 per cent weaker at $0.7471 ahead of the Reserve Bank of Australia’s policy decision later on Tuesday. That followed figures showing net exports as a portion of gross domestic product declined in the first quarter, coming in below estimates and boding ill for GDP data due on Wednesday.

The Japanese yen was 0.6 per cent stronger at ¥109.83 per dollar as data showed wage growth returned in April. Labour cash earnings rose 0.5 per cent year on year in April, coming in above forecasts.

The UK pound was up 0.2 per cent against the dollar at $1.2920 ahead of Thursday’s general election.

The dollar index, which tracks the greenback against a basket of peers, was off 0.1 per cent at 96.678.

Fixed income

The 10-year US Treasury yield, which moves inversely to price, fell 1.7 basis points to 2.164 per cent. The Federal Reserve is expected to raise rates by 25 basis points at its June policy meeting next week.

Commodities

Brent crude oil, the international benchmark, was down 0.7 per cent at $49.15 a barrel after briefly passing the $50 a barrel mark on Monday after four Arab nations cut diplomatic ties with Qatar. US West Texas Intermediate was 0.7 per cent lower at $47.09 a barrel.

Gold was up 0.1 per cent at $1,281.60 an ounce.

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