Japan, China shares outperform, crude extends losses
Chinese shares .CSI300 continued to outperform and were at three-year highs. They added 1.3 percent on top of the previous session’s 2.5 percent surge after officials announced on Monday that a Nov. 17 would mark the beginning of a tie-up that will allow global investors to buy Chinese stocks from Hong Kong.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS erased early losses and eked out a 0.1 percent gain. Japan’s Nikkei stock average .N225 added 1.4 percent, extending gains as the yen turned lower in afternoon trade.
Sentiment was also boosted by the Bank Of Japan’s move on Monday to purchase 38 billion yen ($331.2 million) of exchange-traded funds (ETFs), as part of its recently beefed-up economic stimulus campaign. The news was announced after marketsclosed on Monday.
“The central bank’s purchase of ETFs … is supporting the mood,” said Isao Kubo, equity strategist at Nissay Asset Management.
Data released before the open showed Japan’s current account surplus rose more than expected in September from a year earlier, as income from investments overseas bolstered the balance of payments.
Crude oil prices shrugged off concerns about conflicts in Libya and Ukraine and extended losses. Fears about a global supply glut and slowing growth have pushed oil prices down nearly 30 percent since June. U.S. crude CLc1 shed about 0.4 percent to $77.06 per barrel, while Brent crude LCOc1 shed 0.4 percent to $82.05.
U.S. Treasury prices slipped, putting a solid floor under the dollar as yields ticked higher. U.S. bond markets and government offices will be closed later on Tuesday in observance of the Veterans’ Day holiday, while other markets will trade.
The dollar edged up about 0.2 percent on the day to 115.04 yen JPY=, moving back toward Friday’s seven-year peak of 115.60.
The euro was steady on the day at $1.2424 EUR=, holding above a two-year trough of $1.2358 touched on Friday, but strategists said the single currency remained vulnerable.
“Our global flows data showed selling by both hedge funds and real money accounts post ECB in near record amounts. With both sectors not yet approaching oversold territory, there should be further room for continued selling,” Citigroup’s foreign exchange strategist Todd Elmer said in a note.
Investors had locked in gains on long dollar positions as Treasuries rose after headline U.S. payroll figures on Friday fell short of high expectations. The report still provided evidence of solid improvement in employment conditions, and underscored the brighter U.S. economic picture compared with Europe and Japan.
The Federal Reserve’s monthly labor market conditions index released Monday showed an unchanged 4.0 level for October, which also allayed some concerns.
Diverging monetary policy outlooks between the Fed and both the European Central Bank as well as the Bank of Japan have lifted the dollar against its major rivals in recent weeks.
Spot gold XAU= gained about 0.1 percent to $1,151.30 an ounce after the previous session’s 2 percent slide.-REUTERS