Equity markets in Asia-Pacific held firm after dipping to a one-month low, with stocks in Japan, Hong Kong, and mainland China advancing on the overnight rebound in the value of US Treasuries.
Even though Beijing posted disappointing foreign trade data, the increased UK confidence propelled the regional stock indices up with their valuation over fundamentals, increasing market volatility as a result. Investors are also awaiting US jobs data due Friday, Sputnik reported.
MSCI Apex 50 Index was flat during Friday’s trading, with investors wary of China’s weak foreign trade stance. In Japan, the Nikkei Index added 0.45%, rebounding from its one-month low which it hit on Thursday, mainly due to stabilization in the global bond market.
Investors picked up the thread of buying governmental debt worldwide after yields hit dangerously high levels, with German bunds yielding 0.8%, French bonds yielding 1% and yields on Italian and Spanish bonds reaching 2% on Thursday. The rout reversed in the US Thursday night, with Treasuries gaining overnight after yields grew making the the bonds too appealing to remain in low demand, and investors rushed back into the fixed-income market.
The yield on the US Treasuries snapped its eight-session winning streak, retreating to the safer 2.155% compared to Thursday’s peak of 2.321%.
Mainland China’s stock indices were up 2.28% in Shanghai. The gains could be bigger, but the frustrating news of China’s exports having fallen an annualized 6.4% in April, compared to the anticipated buildup of 2.4%, undermined Chinese shares.
Hong Kong’s Hang Seng Index rose 1.05%, while Korea’s Kospi added 0.1%. Australia’s S&P/ASX 200 Index slipped 0.2% on the Chinese pessimism, as weaker Chinese exports suggest the mainland is set to import less Aussie raw materials as well. In April, mainland China’s imports slumped by 17.3%, indicating the nation its losing its role of the regional growth driver.
