Asia Stocks Edge Up With Fed in Focus; Dollar Dips

26/04/2021 Most stocks in Asia are drifting higher this morning as investors look for clues on the economic recovery in a big earnings week and a Federal Reserve meeting. The dollar and Treasuries slipped. An MSCI Inc. gauge of the region’s stocks rose, though individual market moves across the region were muted. U.S. futures fluctuated after most major groups in the S&P 500 advanced Friday. The 10-year Treasury yield ticked higher, though remained below 1.6%. Copper surged to the highest in a decade on expectations supply will tighten as the global economic recovery gains traction. Oil slipped, while gold edged higher. Bitcoin bounced back above $50,000 as it recovered from the lowest in seven weeks. Tencent trades 0.16% lower in HK. The JSE Top 40 futures are indicating a slightly better start, up 91 points or 0.15%, with the Rand that is fairly steady at 14.27 vs the USD.
Here are some key events to watch this week:

  • Bloomberg Live hosts the Bloomberg Green Summit Monday through April 27
  • Bank of Japan rate decision and Governor Haruhiko Kuroda briefing Tuesday
  • Fed Chair Jerome Powell holds a press conference Wednesday following the FOMC meeting
  • Joe Biden makes his first address as president to a joint session of Congress Wednesday
  • U.S. GDP is forecast to show robust 6% growth in the first quarter, bolstered by government stimulus Thursday
    The FTSE/JSE Africa All-Share Index closed up 0.5% to 67,295, buoyed by the property sector that added 2.47%. The resource sector were also strong with good gains seen in Sasol, Anglo, Glencore and BHP, with Naspers and Prosus also ending the session in positive territory. Retailers and gold shares were on the backfoot as well as some rand hedge counters on the back of a stronger rand. The Rand was up 0.2% to 14.28 per US$, with the Yield on 10-year govt rand bonds that rose 5.50 bps to 9.19%.
    South Africa’s anti-graft commission hears testimony related to former Transnet CEO Siyabonga Gama.

NEWS:

  • S. Africa’s Debt Position Unsustainable, National Treasury Says
  • South Africa Seeks Extradition of Former Eskom Contractor
  • South Africa Contracts Companies to Import Covid-19 Vaccines
    EQUITY PREVIEW:
  • Absa of South Africa Names Modise as Interim Financial Director
  • Coronation’s Total Assets Under Management ZAR629b at End March
    MEDIA SUMMARIES:
  • Daily Maverick: SAA may be ready to resume flights as early as July – interim CEO Thomas
  • Business Day.za: Imperial Logistics gets piece of vaccine action as state awards contracts

EU/UK
European markets closed slightly lower on Friday as global stocks searched for direction to end the week, with investors monitoring a slew of economic data and corporate earnings. The Stoxx 600 index ended the session down by 0.2, with the health care sector falling 1.1% while most major bourses entered negative territory. The pan-European benchmark was down 0.8% on the week. IHS Markit’s euro zone flash PMI readings for April showed the economic recovery gathering pace across the bloc. The preliminary composite reading, which combines services and manufacturing, came in at 53.7 in April versus 53.2 in March, with anything above 50 representing expansion. The U.K.’s composite PMI surged to 60.0 in April from 56.4 in March as the country embarks on a phased exit from lockdown. U.K. retail sales soared 5.4% in March, vastly outstripping expectations ahead of the lifting of restrictions. Daimler upped its profit forecasts for 2021 on Friday morning, but cautioned that the global shortage of semiconductor chips may continue to weigh on second-quarter sales. The Mercedes-Benz maker’s shares were roughly flat by the market close. At the top of the Stoxx 600, Finnish sustainable technology firm Wartsila rallied another 7% after beating earnings expectations on Thursday, while at the opposite end of the benchmark Italian fashion company Moncler dropped 4% after its results.
US
U.S. stocks rebounded on Friday as Wall Street reassessed concerns arising from news that the White House could seek a hike to the capital gains tax. The Dow Jones Industrial Average gained 227.59 points, or 0.7%, to 34,043.49 amid a jump in Goldman Sachs and JPMorgan shares. The S&P 500 rose 1.1% to 4,180.17 led by financials and materials, while the tech-heavy Nasdaq Composite climbed 1.4% to 14,016.81. The S&P 500 closed the turbulent week with just a 0.1% loss, while the Dow and the Nasdaq fell 0.5% and 0.3% for the week, respectively. Intel shares dropped more than 5% after it issued second-quarter earnings guidance below analysts’ hopes. American Express fell over 4% after the credit card company reported quarterly revenue that was slightly short of forecasts. Snap shares, meanwhile, jumped 7.5% after the company said it saw accelerating revenue growth and strong user numbers during the first quarter. Snap broke even on the bottom line while posting revenue of $770 million.
ASIA
Shares in major Asia-Pacific markets were mostly higher in Monday trade as investors continue to watch the Covid situation in India. In morning trade, the Nifty 50 in India jumped about 1.2% while the BSE Sensex advanced 1.32%. The Covid situation in India remains severe as the country continues to battle a startling rise in new coronavirus infections. On Sunday, nearly 350,000 new daily infections were registered. Elsewhere regionally, the Nikkei 225 in Japan gained 0.65% while the Topix index rose 0.38%. South Korea’s Kospi advanced 0.76%. Mainland Chinese stocks also rose, with the Shanghai composite up 0.19% and the Shenzhen component gaining 0.548%. Hong Kong’s Hang Seng index rose about 0.1%. Over in Australia, the S&P/ASX 200 was largely unchanged. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.66%.
COMMODITIES
Gold edged higher as investors turned their focus to a Federal Reserve meeting and more U.S. economic data due later this week, while the dollar weakened. Spot gold rose 0.2% to $1,780.64 an ounce by 10:49 a.m. Shanghai time. Silver and palladium were steady, while platinum gained.
Oil declined in Asian trading as investors assessed the outlook for demand ahead of a key OPEC+ meeting later this week. Futures in New York slipped below $62 a barrel after advancing 1.2% on Friday, the most in more than a week.
Copper surged to the highest in a decade on expectations supply will tighten as the global economic recovery gains traction. Prices have climbed amid a broad rally across industrial commodities from iron ore to aluminum. Copper on the London Metal Exchange rose 1% to $9,650 a ton.
Iron ore futures in Singapore and steel prices jumped to fresh highs, driven by strong demand in China just as the potential risk of a tighter seaborne market starts to build. The futures surged to near $190 a ton on Monday – the highest since 2013 — as prices of the alloy in China touched multiyear highs