Checkout
Cart: $0.00 - (0 items )

Haven assets find favour in Asia while oil slides

Wednesday 03:20 BST

Overview

Stock markets in Asia softened following a lukewarm lead from Wall Street as oil prices gave up recent gains, while haven assets including gold, government bonds and the Japanese yen rallied.

Hot topic

Tokyo’s Topix index was down 0.5 per cent as a firmer yen squeezed exporters’ shares and energy stocks tumbled 2 per cent on slipping oil prices.

The Nikkei 225 was down 0.5 per cent, further diminishing the odds it could cross the 20,000-point mark for the first time in two years this week.

In Australia the benchmark S&P/ASX 200 was down 0.8 per cent, with Wesfarmers dropping 1.2 per cent after the DIY-to-retail conglomerate blamed a poor market climate for its decision to scrap a proposed initial public offering of its office stationery and equipment division.

Hong Kong’s Hang Seng index was flat as a 0.8 per cent dip for the energy segment offset gains of 1 per cent in real estate. Alibaba Health, the Chinese ecommerce conglomerate’s Hong Kong-listed health arm, was up 2.5 per cent despite reporting that net losses widened in the year that ended in March. Parent Alibaba is due to report annual earnings on Thursday.

Forex

The Japanese yen strengthened as much as 0.6 per cent to ¥112.5 per dollar, its firmest level in nine days, following more political tumult in Washington.

On Tuesday, a memo from James Comey revealed that President Donald Trump had asked the FBI director to halt the investigation into Michael Flynn, the former National Security Adviser who was fired in February.

The dollar index tracking the greenback against a basket of peers was down 0.1 per cent, at its lowest level since November’s US presidential election.

The South Korean won was down 0.2 per cent at Won1,118.3 per dollar, though still 0.8 per cent stronger this week following last week’s election of President Moon Jae-in.

The Australian dollar was also off 0.2 per cent against its US counterpart, at $0.7412, following data showing consumer confidence deteriorated in April, derailed by flat wage price data.

Fixed income

Sovereign bonds were rallying, finding favour with investors as stock prices dropped. The yield on 10-year US Treasuries was down 2 basis points at 2.303 per cent. Yields move in the opposite direction to prices.

The 10-year Australian government bond yield fell 4 bps to 2.54 per cent while the yield on the equivalent South Korean bond was 2bp lower at 2.27 per cent.

Japanese government bonds were relatively unmoved, with the 10-year yield basically flat at 0.035 per cent.

Commodities

Oil prices continued to drop in Asia trade after giving up early gains during the previous session to close slightly lower.

Brent crude, the international benchmark, was down 1 per cent at $51.15. West Texas Intermediate, the US marker, was down 1.1 per cent at $48.15.

Gold was enjoying its haven status, climbing 0.4 per cent to $1,242.61 an ounce.

For market updates and comment follow us on Twitter @FTMarkets