Global stocks edged higher Monday ahead of what promises to be an extraordinary week for risk events around the world, with a trio of major central bank rate decisions, a key court case that could unlock billions in media sector mergers and a nuclear summit in Singapore that could mark a major advance towards peace on the Korean peninsula.
"The G7 meeting in Canada reiterated the growing rift between Washington and its allies over free trade," wrote Tai Hui, chief market strategist for Asia Pacific at JPMorgan Asset Management. "Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer," he said, adding that central bank meetings would be critical events this week, news outlets reported.
US President Donald Trump and North Korean leader Kim Jong-un will have an unprecedented meeting on Tuesday in Singapore, possibly laying the groundwork for ending a nuclear stand-off between the old foes.
Some analysts also raised the prospect of international sanctions against North Korea being lifted.
If anything, markets believe the G7 summit might force policymakers to adopt a cautious stance as two of the world’s top central banks – the U.S. Federal Reserve and the European Central Bank – are set to tighten policy this week.
Asian stocks wobbled in early trade after Trump raised fresh fear of a global trade war when he backed out of a joint Group of Seven communique at the weekend, in a blow to the group’s efforts to show a united front.
The S&P 500 futures were almost flat after dropping as much as 0.3%. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped early but was last up 0.25%. Hong Kong’s Hang Seng gained 0.3% while the Shanghai composite index fell 0.3%. South Korea’s Kospi added 0.5%, and Japan’s Nikkei climbed 0.7%.
Southeast Asian shares were mostly lackluster with the Philippines and Singapore indexes posting moderate gains.
Philippine shares edged up 0.4% with SM Investments Corp gaining 1.1% and JG Summit Holdings Inc up 2.8%. Singapore shares rose 0.2% led by gains in financials shares as DBS Group ended 0.5% higher.
Vietnam shares ended flat, after seven sessions of gains, with Vietnam Dairy Products JSC up 1.8% and Vietjet Aviation JSC climbing 2.8%. Malaysian shares ended 0.1% lower, weighed down by financials such as Public Bank and CIMB Group.
Indonesian financial markets are closed from June 11 to June 19 for Eid al-Fitr, while the Philippines will be closed on Tuesday for Independence Day, Reuters reported.
Shanghai stocks fell for a third straight session on concerns about thinner than normal volume, touching their lowest level in just over a year. So far this year, the Shanghai index has fallen 7.7% and the bluechip CSI300 is down 6.2% but China’s H-share index in Hong Kong is up 4.1%.
Emerging market stocks also shrugged off global trade tensions. The MSCI’s 24-country emerging economy stocks index gained 0.5%, moving it away from last week’s year-to-date lows and as the South Korean and Indian stock markets outperformed.
Turkey’s lira also fell back 0.8% to 4.5 to the dollar despite data showing its economy grew a stronger-than-expected 7.4% year-on-year in the first quarter.
Europe
European stocks opened firmly higher Monday, with the banking sector leading the charge, as deeper bets on a change in policy from the European Central Bank this Thursday boost both the single currency and regional government bond yields.
The Stoxx Europe 600 index, the region's broadest measure of share prices, gained 0.48% in the opening minutes of trading, while Italy's FTSE MIB benchmark surged 2.03% as investors piled back into Europe's third-largest economy following a weekend interview with Finance Minister Giovanni Tria that categorically rejected the idea of any plans to leave the single currency, The Street reported.
Germany's DAX performance index gained 0.54% to start the week even as shares in benchmark heavyweight Daimler AG fell 1.4% following a weekend report from the Bild am Sonntag newspaper that alleged Germany's road regulator, the KBA, found so-called 'defeat devices' in the company's Euro 6 diesel fleet.
An MSCI index of European stocks was up 0.7% in early trading, not far from a recent two-week high. The S&P 500 futures were 0.1% lower after dropping as much as 0.3% in early trading, indicating a firm start for Wall Street.
The Canadian dollar, which has been dogged by fears Trump may scrap the North American Free Trade Agreement, fell 0.25% to C$1.2959 to the dollar.
The euro, which was lifted last week amid the prospect of the ECB signaling its exit from easy policy, was 0.25% higher at $1.1801.
