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TOKYO (Reuters) – Asian stocks advanced slightly on Tuesday, strengthening after a week of heavy losses, although growing tensions between Saudi Arabia and the West have fueled geopolitical concerns and capped gains.
People pass in front of an electronic board showing the Japanese average of the Nikkei (the largest number) and the exchange rate of the Japanese yen against the US dollar outside a broker in Tokyo, Japan, October 15, 2018. REUTERS / Toru Hanai
The broader Asia-Pacific MSCI equity index outside Japan rose 0.25%, breaking a 19-month low reached on Thursday.
Japan's Nikkei rebounded 0.6% after dropping nearly 2% the day before.
The disappearance in Turkey earlier this month of a Saudi journalist critical of Riyadh provoked an international outcry against the oil-rich kingdom, which shook its financial markets.
US President Donald Trump has sent Secretary of State Mike Pompeo to Saudi Arabia to review the case, which could undermine the relationship between strategic allies.
"The focus on the Saudi markets has focused on the markets. And as US stocks are still struggling, other stock markets will struggle to bounce convincingly, "said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
"The United States has been the epicenter of the recent market turmoil, as Wall Street stocks have been penalized by higher Treasury yields. US stocks will have to find their marks first. "
Saudi Arabia's riyal fell overnight to 3.7525 to the dollar, the weakest in two years.
Wall Street shares were dragged down overnight by a decline in technology stocks, amid lingering concerns over the high yields of US bonds. [.N]
The Dow lost 4.5% this month, away from record highs, while long-term Treasury yields hit their highest level since 2011. Higher yields hurt the pull actions.
Hong Kong's Hang Seng added 0.15% and the Shanghai Composite Index was up 0.1%.
Data released on Tuesday showed that Chinese factory output inflation declined for a third consecutive month in September as a result of lower domestic demand, indicating increased pressure on the world's second-largest economy. it is struggling with a growing trade war with the United States.
Safe haven values, such as the yen and the Swiss franc, were maintained thanks to riskier assets.
The dollar traded at 111.95 yen, not far from a one – month low of 111.625 brushed overnight.
Against the dollar, the Swiss currency was established at 0.9882 francs, after having increased by 0.5% the day before.
The euro has changed little, at $ 1.1574, after rising 0.2% the day before.
Sterling was at $ 1.3145, after rebounding from a weeklong lows at $ 1.3080 on Monday in a stalemate over the post-Brexit status of the border between Britain and Ireland.
The US money market report was due to be released later today, as investors waited to see what Washington thought of China after the press announced last week that the ministry did not qualify Beijing monetary manipulator.
"It is clear that China does not meet the criteria of the monetary manipulator based on the current valuation, the current account surplus of the country as a percentage of GDP having fallen below 3%", wrote the OCBC Bank strategists.
The Chinese yuan was a bit weaker at $ 6,924 per US dollar.
On the commodity front, tensions between the United States, the world's largest oil consumer, and Saudi Arabia, one of the largest producers, have pushed crude oil prices higher due to the offer. [O/R]
Futures contracts on Brent rose 0.3% to $ 81 a barrel, an increase on Monday.
Gold safe havens was at $ 1,225.51 an ounce, at a distance of a nearly three-month high of $ 1,233.26, staggered on Monday.
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