Asian shares tread water as dollar slips; Tencent jumps 5%
Asian stocks were narrowly mixed on Thursday, shrugging off the firmer close on Wall Street as the yield on the U.S. 10-year Treasury stayed above 3 percent.
The Nikkei 225 rose 0.53 percent in Tokyo, shrugging off weak core machinery orders, a leading indicator for capital expenditure, for the month of March. The broader Topix was higher by 0.4 percent, with its oil and iron subindexes among the best-performing sectors.
Over in Seoul, the Kospi was flat, with manufacturing stocks trading higher, while technology shares were mixed. Index heavyweight Samsung Electronics eased 0.4 percent.
Hong Kong’s Hang Seng Index was little changed, with the benchmark trading lower by 0.01 percent as banks and insurers slipped. On the mainland, the Shanghai composite shed 0.23 percent and the Shenzhen composite eased 0.29 percent.
Down Under, the S&P/ASX 200 edged down by 0.31 percent. The heavily weighted financials subindex declined 0.56 percent, dragging the index lower but paring steeper losses seen earlier. The materials and energy sectors, meanwhile, were among the few sectors carving out gains.
MSCI’s index of shares in Asia Pacific excluding Japan held above the flat line, tracking higher by 0.11 percent.
The mostly sideways trade in Asia came after U.S. stocks closed higher on Wednesday, with retail sector stocks climbing following strong results from department store company Macy’s. Of note, the small-cap Russell 2000 added 1 percent and finished at a record close.
The yield on the 10-year U.S. Treasury note rose to a fresh near seven-year high on Wednesday, surpassing the 3.1 percent level for the first time since Jul 8, 2011.
Elsewhere, Italy’s right-wing Lega party denied reports that it was seeking a 250 billion euro ($296 billion) debt write-off if it becomes part of a power-sharing deal with the anti-establishment 5-Star Movement. In reaction, the country’s FTSE MIB fell 2.32 percent on Wednesday while Italian bond yields moved higher.
On Thursday, the euro traded at $1.1826 at 11:35 a.m. HK/SIN, paring some losses after hitting a five-month low in the previous session.
Meanwhile, President Donald Trump said on Wednesday that whether his planned meeting with North Korean leader Kim Jong Un goes through remained to be seen. Earlier, North Korea said it would rethink the June 12 summit if the U.S. insisted on denuclearization.
The uncertainty did not appear to have a major impact on markets in the region.
“I think investors are just going to hold on the sidelines and kind of watch this, see how it develops. I expect there to be a lot of this sort of political rhetoric leading into the summit. I don’t think it’s going to be a big investment thesis for the markets,” Jack McIntyre, portfolio manager at Brandywine Global Investment Management, told CNBC’s “Squawk Box.”
The dollar index, which tracks the U.S. currency against a basket of major currencies, slipped to trade at 93.169 after rising to a five-month high of 93.632 overnight. Gains in the greenback in recent week come amid expectations that the Federal Reserve will be more hawkish than other central banks.
Against the yen, the dollar traded at 110.15 at 11:34 a.m. HK/SIN.
On the energy front, U.S. crude futures rose 0.35 percent to trade at $71.74 per barrel and Brent crude futures added 0.14 percent to trade at $79.39.
Among individual movers, shares of Tencent got a boost after the tech giant reported first-quarter net profit rose 61 percent to 23.9 billion yuan ($3.66 billion), topping an average Thomson Reuters forecast of 17.5 billion yuan. Tencent stock jumped 5 percent.
— CNBC’s Thomas Franck and Silvia Amaro contributed to this report.