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Asian equities start week on the back foot

Monday 03:30 BST

Overview

Equities made a choppy start to the week in Asia, while the Mexican peso suffered from continued election uncertainty and Brent crude oil climbed back above the $50-a-barrel mark.

Hot topic

Stocks in the region were under pressure, with Australia’s S&P/ASX 200 index dropping 0.7 per cent under the weight of banks, energy and mining stocks.

Shares in Australia’s four major banks were all off by more than 1 per cent, with Westpac down 2.4 per cent.

In Japan the Topix was off 0.1 per cent as a 1.4 per cent rise by telecoms stocks was offset by a 1.4 per cent fall for the energy segment. SoftBank was up 2.7 per cent on reports the telecoms conglomerate was seeking another $7bn for its tech fund.

In Hong Kong the Hang Seng index slipped 0.1 per cent, led by utilities and industrials. China Shenhua Energy rose 3.2 per cent on media reports that its parent group was in merger talks with that of Guodian Technology and Environment, shares in which were up 15.2 per cent.

Mainland Chinese stock markets were diverging, with the Shanghai Composite index down 0.3 per cent and the tech-focused Shenzhen Composite up 0.8 per cent.

Forex

Mexico’s peso was the biggest mover among international currencies, dropping 0.7 per cent to 18.8026 per dollar amid uncertainty surrounding the outcome of a key gubernatorial election for the state of Mexico in which both sides were claiming victory, ahead of official results.

The dollar index, which tracks the greenback against a basket of peers, was off 0.1 per cent at 96.773.

The pound weakened 0.2 per cent to $1.2866 in the wake of terror attacks in London at the weekend that left seven dead and 48 injured.

In Asia Pacific currency markets, the Japanese yen lost 0.2 per cent to ¥110.61 per dollar while the Australian dollar edged up 0.1 per cent against its US counterpart, to $0.7455.

The South Korean won gained 0.3 per cent against the greenback to Won1,118.74 after the cabinet of President Moon Jae-in approved a $10bn extra budget to create more jobs, in line with Mr Moon’s campaign pledge to prioritise employment.

Fixed income

Sovereign bonds were mixed in Asia Pacific trading. The yield on 10-year US Treasuries was flat at 2.163 per cent.

The 10-year Australian bond yield fell 3 basis points to 2.38 per cent as the country’s equities slumped, but that for the equivalent Japanese government bond was virtually unmoved at 0.041 per cent. Yields move inversely to prices.

Commodities

Oil prices were rising in Asia. Brent crude, the international benchmark, climbed 0.2 per cent to $50.04 a barrel, back above the $50 mark after ending Friday down 1.3 per cent. West Texas Intermediate, the US marker, was up 0.3 per cent at $47.78.

Gold was up 0.1 per cent at $1,279.82.

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