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Global Markets Higher; Australia Is the Exception -- Update

27 Jun 2017 5:10 am
By Ese Erheriene 

Stocks extended gains in Asia-Pacific trading Tuesday, though advances were modest, while Australian equities continued to lag behind as its utility and mining stocks declined.

Mining stocks had given some support to Australia's market a day earlier, but miners were hit Tuesday after industrial and precious metals fell as the dollar rose overnight.

Also causing some concern was the 1% drop in gold prices that came immediately after the release Monday of a German business-sentiment index showing a gain to record highs. More than 1.8 million troy ounces of gold were traded within a minute, "more than the volumes traded...during recent global risk events," noted ANZ Research, raising the prospect that human error was at play. After hitting a six-week low Monday, the metal was little changed in Asian trading Tuesday.

Australian-listed gold miners Tuesday were down more than 1%. Utilities stocks--good performers of late despite the broader softness in Australian stocks--were also lower, with the utilities subindex of the benchmark S&P/ ASX 200 down 1.5%.

The ASX, the only major Asia Pacific stock index down for June, was recently off 0.1% for the day.

While Taiwan's Taiex was struggling to stay ahead Tuesday after eight straight sessions of gains, stocks in most other markets, lacking broad trading catalysts, were modestly higher.

Korea's Kospi gained 0.3%, putting it on pace for another record high, while the Nikkei added 0.3% to hit its best level in a week. Helping equities there was an overnight decline in the yen, which fell with gold in an apparent move from some havens. The dollar hit its best level in a month, briefly trading above Yen112.

The Nasdaq Composite slipped overnight despite gains in a number of Asian tech companies Monday. That was pressuring Taiwan stocks, among others. Regional equities "could find more disparate returns on the heels of a tech slide," said Jingyi Pan, a market strategist at IG Group.

Later Tuesday investors will closely watch comments from Federal Reserve Chairwoman Janet Yellen.

During a slow news week as the second quarter comes to an end, "what matters most...is Fedspeak," said Kathy Lien, head of forex strategy at BK Asset Management. She added that if Ms. Yellen repeats hawkishness expressed earlier this month following the central bank's latest interest-rate increase, the dollar is poised to rise further against the yen.

Investors want to know whether Ms. Yellen believes recent softness in some U.S. data is transitory. Policy makers' latest forecasts suggest as much, continuing to project three interest-rate increases both this year and next.

Kenan Machado contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com
 

(END) Dow Jones Newswires

June 27, 2017 01:10 ET (05:10 GMT)

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