Asian raw-material producers advanced after a surge in commodity prices bolstered optimism the global economy can gather momentum. Oil extended last week’s strongest rally this year.
BHP Billiton Ltd., Rio Tinto Ltd. and Nippon Steel & Sumitomo Metal Corp. underpinned gains on the MSCI Asia-Pacific Index, which is on track to rise for a seventh month. Equity gauges from Tokyo to Sydney were mixed, while European futures were little changed in early trading as HSBC Holdings Plc and Heineken NV reported earnings that beat analyst estimates.
Investors are assessing economic numbers from the world’s top three economies. China’s official factory gauge, the manufacturing purchasing managers index, slipped to 51.4 in July, compared to the 51.5 median forecast in a Bloomberg survey of economists and 51.7 in June, amid government efforts to curb financial risks. The U.S. economy expanded 2.6 percent in the second quarter, indicating the world’s largest economy is growing steadily. Meanwhile, Japan’s industrial output for June rose 1.6 percent from the previous month, rebounding amid solid global demand.
Asian stocks have rallied this year as evidence emerged of a resilient global economy. The MSCI Asia Pacific Index is set for a 3.7 percent gain in June, the biggest since January. It advanced 0.3 percent as of 3:30 p.m. in Tokyo, with a subindex of commodity producers up 1.3 percent, the biggest gain among industry groups.
Corporate earnings remain of interest, with Apple Inc., Tesla Inc., Berkshire Hathaway Inc. and Toyota Motor Corp. slated to unveil results throughout the week. HSBC’s second-quarter profit beat analysts’ estimates as outgoing Chief Executive Officer Stuart Gulliver boosted revenue while also trimming costs, and the lender said it will spend up to $2 billion buying back stock.
Geopolitics are back in focus, after Russia ordered the U.S. to slash staff at its diplomatic missions in the country in retaliation for new sanctions approved by Congress, while North Korea on Friday test-fired an intercontinental ballistic missile for the second time in weeks, threatening to sour relations between the U.S. and China.
Here are some key events coming as the week gets going:
- The Reserve Bank of Australia and the Reserve Bank of India both hold meetings this week.
- Thai current account data and factory output figures are due Monday.
Here are some of the key moves in markets:
- Japan’s Topix index closed 0.2 percent lower after swinging between gains and losses. Earnings that beat expectations from the likes of Hitachi Ltd. and TDK Corp. were outweighed by a firmer yen against the dollar. Australia’s S&P/ASX 200 Index rose 0.3 percent and South Korea’s Kospi index added 0.1 percent.
- Hong Kong’s Hang Seng Index added 1.1 percent. HSBC was among the biggest contributor to the advance as the stock jumped 2.5 percent to the highest intraday level since November 2014. The Shanghai Composite Index rose 0.6 percent.
- Euro Stoxx 50 futures rose 0.1 percent as of 7:52 a.m. in London.
- Futures on the S&P 500 Index fell 0.1 percent. A bout of volatility last week sent the Nasdaq 100 Index lower and S&P 500 Index lower.
- The yen pared gains to trade little changed at 110.64 per dollar, near Friday’s 1 1/2-month high, and the euro bought $1.1733.
- The Australian dollar fell 0.1 percent to 79.80 U.S. cents after last week hitting 80 cents. The Aussie rebounded from a brief dip following the latest China data.
- The Bloomberg Dollar Spot Index rose 0.1 percent after declining 0.4 percent last week for a third week of retreats.
- The yield on 10-year Treasuries fell one basis point to 2.28 percent.
- The yield on 10-year bunds was steady at 0.54 percent in early European trading.
- 10-year Australian government notes were steady at 2.69 percent.
- West Texas Intermediate rose 0.3 percent to $49.88 after briefly testing above $50 a barrel for the first time since May. It added to gains from Friday, which came as inventories for crude and gasoline shrank.
- Copper climbed as much as 1.2 percent to $6,400 a metric ton, matching the intraday level reached last week. Copper’s rally has further to go, Citigroup Inc. said last week after the metal reached a two-year high while top producer Chile raised its price forecasts.
- Gold was little changed at $1,268.48 an ounce, set for a sixth month of gains in seven.