Tuesday, July 4, 2017

Tuesday, July 4, Morning Global Market Roundup: Asian Shares Ride U.S., European Gains, Dollar Hovers Near Seven-Week High

By Nichola Saminather 
Reuters
July 4, 2017

Asian shares rose on Tuesday, thanks to strength in Europe and the United States as oil's longest stretch of daily price gains in over five years lifted energy shares, while markets in Seoul were briefly shaken by a missile launched by North Korea.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 percent.

Japan's Nikkei was up 0.4 percent, and South Korea's KOSPI was 0.1 percent lower.

The KOSPI earlier dropped as much as 0.4 percent and the South Korean won stumbled 0.3 percent after reports North Korea had launched an missile that could land in Japanese exclusive economic zone. South Korean President Moon Jae-in called a meeting of the National Security Council in response.

The South Korean currency was last down 0.1 percent at 1,148.1 won to the dollar.

Australian shares advanced 1.65 percent, bouncing solidly from a 2.3 percent loss over the previous two sessions.

"Synchronised gains for both U.S. markets and the U.S. dollar was seen overnight with optimism channeled to the markets at the start of the week," Jingyi Pan, market strategist at IG in Singapore, wrote in a note.

Overnight on Wall Street, the S&P 500 index and the Dow Jones Industrial Average posted gains of 0.2 percent and 0.6 percent, respectively, led by financials and energy shares. The Nasdaq lost 0.5 percent, as the rotation away from technology names continued.

An error in Nasdaq's computer systems caused some third-party providers to incorrectly show large after-hours swings for the prices of Amazon Inc, Microsoft Corp and Apple Inc shares. Google parent Alphabet Inc and eBay Inc shares were among others that all appeared to be priced at $123.47 on some financial news websites on Monday evening.

The actual prices of the stocks were not affected and no trades were completed at that price, a Nasdaq spokesman confirmed.

U.S. markets are closed on Tuesday for the independence day holiday.

European markets posted even stronger gains, with the FTSEurofirst 300 jumping as much as 1.2 percent following steep losses last week.

In currency markets, the dollar crept down 0.2 percent to 113.275 yen on Tuesday, but remained within a hair of a seven-week high of 113.47 touched on Monday.

The dollar jumped after a private index of June domestic manufacturing activity rose more than expected while other data showed government outlays on construction projects in May at their highest in more than four years.

That sent two-year U.S. Treasury yields surging to their highest level since November 2008.

"Expectations towards the Federal Reserve hiking interest rates later this year had perhaps sunk too low," said Shin Kadota, a senior strategist at Barclays in Tokyo. "We are now seeing such lowered expectations being reversed a little."

The dollar index, which tracks the greenback against a basket of trade-weighted peers, was down almost 0.1 percent at 96.146, holding on to most of Monday's 0.6 percent gain.

The Australian dollar climbed 0.1 percent to $0.7666 ahead of a Reserve Bank of Australia meeting at which the central bank is expected to leave benchmark interest rates unchanged at a record low 1.5 percent.

The euro was little changed at $1.1366 on Tuesday.

Sterling inched higher to $1.294, but failed to make up most of Monday's 0.7 percent loss after poorer-than-expected data from Britain's manufacturing sector.

Crude futures posted their first session of losses in nine, ending their longest run of gains since February 2012, as traders closed positions ahead of the U.S. holiday.

U.S. crude slipped 0.5 percent to $46.82 a barrel.

Global benchmark Brent also fell 0.5 percent to $49.41. On Monday, it closed up 3.7 percent, its biggest one-day gain since December 2016.

Gold inched up from its lowest level in more than seven weeks hit on Monday on the dollar's strength. Spot gold was up 0.1 percent at $1,222.21 an ounce on Tuesday.


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