Asia stocks point to mixed open, dollar hovers near 7-month high
TOKYO, Oct 25 — Asian stock futures pointed to a mixed open today after equities rallied overnight and ahead of earnings from the world’s biggest company Apple Inc. The dollar hovered near a seven-month high following gains over the past three weeks.
Shares in Wellington advanced, as equity-index contracts in Hong Kong and South Korea declined. Nikkei 225 Stock Average futures rose 0.5 per cent in Osaka as the yen extended losses from the previous session. Oil fell for a second day as Iraq, OPEC’s second-biggest producer, threatened to derail the group’s plan to stabilise crude markets by saying it should be exempt from planned output cuts.
Equities have had a strong run as a flurry of deals spurred investor optimism amid earnings reports. More than a third of S&P 500 Index’s members are scheduled to report results this week, including Apple and Boeing Co, with 80 per cent of the companies that have already done so beating estimates. Currency volatility fell to the lowest level this year on speculation markets have sufficiently priced in the probability of a US interest-rate increase in coming months.
“We face a sizeable amount of event risk this week, but it seems the bulls are getting the upper hand in a number of equity indices,” said Chris Weston, chief market strategist at IG Ltd in Melbourne. “Good buying has been seen in the technology and staples sectors, and tech will play a big role in price action for the remainder of the week, with Amazon, Apple and Alphabet out with numbers.”
Apple’s net income was US$8.91 billion (RM37.17 billion) on revenue of US$46.9 billion in the September quarter, according to the mean estimate of analysts surveyed by Bloomberg. The technology behemoth reports earnings today. The stock has risen 4 per cent this month.
Currency volatility declined as bets for US monetary tightening plateaued after rising since the end of June on signals of faster economic growth and accelerating inflation. Polls showed Democratic nominee Hillary Clinton expanded her lead against Republican Donald Trump, both nationally and in battleground states, reducing political uncertainty and putting more focus on monetary policy. The Bloomberg Dollar Spot Index, which measures the US currency against 10 counterparts, was little changed, holding a three-day advance.
In terms of economic data, South Korea’s gross domestic product expanded 0.7 per cent in the third quarter from the previous three-month period, beating estimates. Japan’s cabinet office will release its monthly economic report.
New Zealand’s S&P/NZX 50 Index, the first major equity gauge to start trading each day, rose 0.3 per cent as of 8:08am Tokyo time.
In Australia, S&P/ASX 200 Index jumped 0.4 per cent. Futures on the Kospi index in Seoul fell less than 0.1 per cent. While markets in Hong Kong haven’t started trading yet, futures on the city’s Hang Seng and Hang Seng China Enterprises Index slipped as much as 0.3 per cent in most recent trading. FTSE China A50 Index futures declined 0.5 per cent.
Nikkei 225 futures rose to 17,340 in Osaka, while contracts on the Japanese index listed in Singapore gained 0.5 per cent. Yen-denominated Nikkei 225 futures were little changed at 17,345 on the Chicago Mercantile Exchange.
West Texas Intermediate crude declined 0.1 per cent to US$50.46 a barrel, extending the 0.7 per cent drop yesterday. Iraq threw an obstacle in OPEC’s path toward a deal to stabilize oil markets when it balked at joining efforts to trim output.
Futures on the S&P 500 Index were little changed after the underlying benchmark climbed 0.5 per cent yesterday. — Bloomberg