Asian stocks rise on Wall St surge, dollar steady

Tags: Stock Market
Asian stocks rose on Monday after Wall Street rallied on an easing of tensions in Ukraine, although conflicts in other geopolitical hotspots such as Iraq limited gains.

Wall Street surged on Friday after Russia said it had finished military exercises in southern Russia, which the United States had criticised as a provocative step amid the Ukraine crisis.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.7% after shedding 0.9% on Friday.

Tokyo's Nikkei rose 1.9%, and also was helped as the yen's sharp rally against the dollar on Friday was reversed. The index had lost 3% on Friday.

US stock futures pointed to a slightly firmer open on Wall Street later in the day.

But Asian investors were wary of piling back into riskier assets as the situation in Iraq was marked by an increasing death toll and new US air strikes.

"We are seeing investor sentiment caught between positive US economic fundamentals and psychological negatives, like geopolitical risk. Investor sentiment is easily swayed under such a situation, which could lead to higher volatility and market turbulence," said Koji Fukaya, president at FPG Securities in Tokyo.

The dollar, which suffered heavy losses against the safe-haven yen last week after US President Barack Obama authorised air strikes in Iraq, stood steady after rebounding sharply late Friday as the Ukrainian news arrested the slide in US Treasury bond yields.

Some observers saw the correlation between lower Treasury yields and weaker dollar loosening amid the latest phase in geopolitical tensions.

Kathy Lien, managing director at BK Asset Management, said heightened geopolitical uncertainty makes Treasuries more attractive to investors and central banks looking to park their money in such safe havens, with their demand supporting the greenback.

"Geopolitical uncertainty is clearly driving risk appetite and the conflicts abroad has made US assets very attractive," she wrote in a note to clients.

The dollar was up 0.1% at 102.13 yen after touching a low of 101.51 on Friday.

The euro stood little changed at $1.3400.

The benchmark US Treasury 10-year note yielded 2.432%, having pulled back from a 14-month low of 2.349% struck Friday.

In commodities, London copper edged up as appetite for risk grew following the move by Russia that soothed tensions over the Ukraine, while optimism over the outlook for China's economy underpinned demand.

Three-month copper on the London Metal Exchange climbed 0.4% to $7,025.00 a tonne.

Gold was off to a muted start to the week as equity markets firmed, but the safe-haven metal held above $1,300 an ounce threshold as the geopolitical situation in the Middle East remained tense.

Spot gold was flat at $1,308.20 an ounce after hitting a three-week high of $1,322.60 on Friday.

Brent crude oil futures rose 0.2% to $105.19 per barrel.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Jayalalithaa’s indictment proves that powerful politicians are not above law

    A cat has nine lives, says a traditional proverb. And what about Jayalalithaa Jayaraman?

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

The true value of organisational vision

Albert Camus famously wrote: ‘Life is the sum of all ...

Kuruvilla Pandikattu SJ

Is virtual empathy becoming a reality?

Are we sophisticated machines? Can artificial intelligence overtake our natural ...

Gautam Gupta

French fashion icon Gaultier’s pret goodbye

With Gaultier gone, the world of international prêt will never ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture