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Thursday, August 11, 2022

Asian Stocks Climb as Kospi Rebounds While Baht Weakens

Asian stocks rose, with the benchmark index climbing a second day, as Korean shares rallied from a two-month low. The baht extended declines versus the dollar after Thai senators rejected an amnesty bill that has sparked protests, while gold maintained its drop.

The MSCI Asia Pacific Index added 0.3 percent by 9:42 a.m. in Tokyo as the Kospi Index jumped 0.9 percent in Seoul, halting a six-day slide. Standard & Poor’s 500 Index (SPX) futures rose 0.1 percent, matching the gauge’s gains in New York. The yen traded at 99.24 per dollar, the weakest level on a closing basis since Sept. 20. The baht headed for a seven-week low while Indian rupee forwards dropped. Gold traded near the lowest price in about four weeks andrubber rose 0.2 percent.

Thailand’s Senate rejected the bill providing amnesty for political offenses after more than 10 hours of debate yesterday. Top Chinese Communist Party leaders conclude a four-day economic policy summit today, while India will probably post the fastest growth in industrial output in 11 months for September. Indonesia is projected to keep interest ratesunchanged for a third month, according to a Bloomberg survey and Japan will report on consumer confidence for October.

China’s leaders are “likely to adopt an ambitious reform agenda but much will hinge on implementation,” Michael Kurtz, the Hong Kong-based global head of equity strategy at Nomura Holdings Inc., said in an e-mail. “Our medium to long-term optimism on Japan remains intact.”

Australia’s S&P/ASX 200 Index gained 0.3 percent, snapping a three-day decline, while Japan’sTopix Index (TPX) rose 0.3 percent, headed for the highest close since Nov. 6.

Sumitomo Earnings

Sumitomo Mitsui Financial Group Inc., Japan’s second-largest lender, Isuzu Motors Ltd. and Korea Electric Power Corp. are among Asian companies scheduled to report earnings today. Sumitomo rose 1.3 percent in a second day of gains today.

Japan’s consumer confidence index probably rose to 45.5 in October, the highest level since May, according to the median of five economists’ estimates in a Bloomberg survey. Indonesia is projected by all but one of the 23 economists polled by Bloomberg to keep its reference rate at 7.25 percent.

Futures on Hong Kong’s Hang Seng Index rose less than 0.1 percent in their most recent trading session, while contracts on the Hang Seng China Enterprises Index added 0.2 percent. The gauge of mainland Chinese stocks traded in Hong Kong snapped a four-day slump yesterday, climbing 1.9 percent. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York rose 0.9 percent in a second day of gains.

China Summit

Chinese media reported yesterday on prospects for allowing private investment in government businesses and for an expansion of the property tax nationwide, while the People’s Daily said the Communist Party needs to demonstrate the “ability to govern.” The four-day meeting, attended by President Xi Jinping and other leaders, aimed to devise a blueprint for sustaining growth in the world’s second-largest economy.

The yen has lost more than 1 percent over the past two days as the dollar strengthened after U.S. economic data bolstered the outlook for cuts to Federal Reserve stimulus. The U.S. government bond market resumes trading today after the Veteran’s Day holiday.

The baht depreciated 0.1 percent to 31.63 per dollar, headed for the weakest closing price since Sept. 18.

Senators voted 141-0 against the draft legislation that would have provided amnesty for political offenses stretching back to the nation’s 2006 coup, Surachai Liengboonlertchai, vice president of the Senate, told reporters late yesterday. The bill will be sent back to the parliament’s lower house, which can resubmit it after 180 days.

Rupee Forwards

Demonstrations against the proposed law are beginning to impact the economy, with tourism and investor confidence the most affected, Bank of Thailand Governor Prasarn Trairatvorakul said at a seminar in Bangkok Nov. 10.

One-month non-deliverable forwards on the rupee lost 0.2 percent to 64.21 per dollar in early trading after the currency sank 1.2 percent yesterday. Indian factory production probably rose 3.5 percent in September from a year earlier, from 0.6 percent in the previous month, according to a Bloomberg survey.

Korea’s won strengthened for the first time in four days, adding 0.1 percent to 1,070.97 per dollar, while the Australian and New Zealand dollars weakened at least 0.1 percent. Australian bonds due in a decade fell a second day, pushing yields up four basis points, or 0.04 percentage point, to 4.26 percent.

U.S. Retailers

In the U.S., the Dow Jones Industrial Average (INDU) added 0.1 percent yesterday, holding a record high as International Business Machines Corp. and Wal-Mart Stores Inc. rallied more than 1.3 percent.

Wal-Mart, Macy’s Inc. and Nordstrom Inc. are among retail companies reporting earnings this week, while Home Depot Inc. posts results Nov. 19.

Of the 448 S&P 500 companies that have released third-quarter profit so far, 75 percent have beaten analysts’ forecasts, data compiled by Bloomberg showed. Earnings per share for the companies on the gauge probably increase 4.7 percent in the third quarter, and will rise 6.2 percent in the fourth, according to estimates compiled by Bloomberg.

Economists still predict the Fed will delay tapering its asset purchases until March even after non-farm payrolls data exceeded forecasts. Policy makers will probably pare the monthly pace of bond buying to $70 billion at their March 18-19 meeting from the current pace of $85 billion, according to the median of 32 estimates in a Bloomberg survey conducted Nov. 8. The median forecast in an Oct. 17-18 survey of 40 economists also called for a cut to $70 billion in March.

Commodity Moves

Gold lost 0.1 percent to $1,281.54 an ounce, after falling a third day yesterday to lose 0.5 percent. The precious metal is headed for the lowest close since Oct. 14. Copper futures fell 0.1 percent.

West Texas Intermediate crude oil dropped 0.2 percent to $94.94 a barrel after rising the past two days. Brent crude surged 1.2 percent yesterday.

Iron ore is extending a bull market on record sales to China that are spurring forecasters from Morgan Stanley to the World Bank to increase price predictions.

Shipments from Australia’s Port Hedland, the biggest iron-ore export terminal, to China jumped 43 percent to a record last month, port data show. The Asian nation already imported the most ore ever in September, according to customs data. Standard Bank Group Ltd. and the Bureau of Resources and Energy Economics, Australia’s state forecaster, also increased price estimates in the past several weeks.

Source: Bloomberg

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