Asian stocks may track US gains after GDP as oil resumes drop

TOKYO, Aug 1 — Asian index futures signaled gains following a bounce in US shares as evidence of tepid growth in the world’s largest economy damped prospects for higher interest rates. The yen pulled back, while crude oil swung back to losses.

Futures on stock gauges in Australia, South Korea and Hong Kong rallied at the end of last week, as the S&P 500 Index climbed after a weaker-than-expected reading on US second-quarter gross domestic product. Futures on Japan’s Nikkei 225 Stock Average also foreshadowed gains. Copper climbed ahead of a slew of manufacturing data, while crude retreated after spiking higher as the GDP data weighed on the dollar. The yen fell following a 3.1 per cent surge as the Bank of Japan boosted purchases of exchange-traded funds Friday.

Traders have peeled back bets on a US rate hike this year, even after San Francisco Fed chief John Williams and his counterpart in Dallas, Rob Kaplan, played down the GDP number, saying it didn’t exclude a move on borrowing costs in 2016. The data — which showed annualized GDP rose 1.2 per cent last quarter, below the 2.5 per cent growth projected by economists — came on the heels of the BOJ’s decision to bolster ETF buying, while keeping purchases and rates unchanged. The focus now shifts to Tomorrow, when Prime Minister Shinzo Abe may unveil details of his fiscal stimulus package.

“Just at a time when evidence was building that the US economy was in a position for the Fed to again contemplate , some weak domestic data or a global event quite quickly scuttles those plans,” Philip Borkin, a senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a note to clients. While some Fed officials have “come out noting that it is just one data point and we shouldn’t overreact, the fact remains that many on the FOMC appear to be looking for excuses not to hike.”


Futures on the S&P 500 climbed 0.1 per cent to 2,171.50 as of 8.05am Tokyo time, after the underlying benchmark rose 0.2 per cent on Friday in a second day of gains. New Zealand’s S&P/NZX 50 Index, the first major stock gauge to start trading each day, dropped 0.1 per cent after closing at a record last session.

Yen-denominated Nikkei 225 futures jumped 0.8 per cent on the Chicago Mercantile Exchange early Today, to 16,430, while contracts traded in the Osaka pre-market were bid up 1 per cent to 16,450.

Futures on South Korea’s Kospi index rose 0.2 per cent late on Friday, as those on Australia’s S&P/ASX 200 Index increased 0.3 per cent. In Hong Kong, contracts on the Hang Seng and Hang Seng Enterprises indexes climbed at least 0.6 per cent as FTSE A50 Index futures added 0.4 per cent.

Manufacturing purchasing managers’ indexes are due for China to Japan today, while both Thailand and Indonesia update on consumer prices. — Bloomberg
Source: The Malay Mail

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