Stocks mixed as rally stalls; yen declines

Asian stocks traded mixed Wednesday as traders juggled continuing doubts about the prospects for progress on trade with signs of China stimulus and moves to end the US government shutdown. The yen slid as the Bank of Japan cut its inflation outlook.

Shares slipped in Japan, rose in Korea and fluctuated in Hong Kong and China. US futures posted modest gains following Tuesday’s decline in all major benchmarks led by a slide in technology shares. European contracts showed small losses. White House adviser Lawrence Kudlow said that negotiations scheduled for next week will be "very, very important" and "determinative."

Meantime, the Senate scheduled a vote for Thursday on Democratic-backed legislation to reopen the government, the first sign of a possible way out of the shutdown. China’s central bank pumped liquidity into the banking system through a new tool.

The yen extended losses against the dollar after the Bank of Japan left its policy unchanged and cut its inflation outlook again.

The yuan rose even after the People’s Bank of China offered 258 billion yuan (about $38bn) to banks through its medium-term lending tool, part of efforts to encourage lending to small businesses and bolster growth.

"Investors obviously are still a little bit edgy and therefore we would expect periods of volatility to continue," said Mark Hackett, chief of investment research at Nationwide Funds Group, which manages $60bn.

"As the headlines continue to get more nerve wracking with regards to a global slowdown and trade wars and government shutdowns, it’s easy to spook investors, but we think those are temporary versus permanent."

Elsewhere, oil held losses near $53 a barrel. The pound steadied after signs the UK Parliament is moving closer to a plan to delay Brexit.

These are some events investors will be watching out for in the coming days:

Earnings season is in full swing: IBM, United Technologies, Texas Instruments, and Ford are among companies posting results this week.

The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.

There are monetary-policy decisions for the Bank of Korea and the European Central Bank, both Thursday.

And these are the main moves in markets:

Stocks

The MSCI Asia Pacific Index fell 0.3% at 15:13 Tokyo time. Japan’s Topix Index declined 0.6% at the close.

Hang Seng Index was flat after swinging between gains and losses at least six times. Shanghai Composite Index was flat after rising as much as 0.4% and dropping 0.3%.

S&P/ASX 200 dropped 0.3%. S&P 500 futures rose 0.2%. The S&P 500 Index fell 1.4%, while the Nasdaq Composite Index tumbled 2%.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%. The euro rose 0.1% to $1.1367. The British pound was little changed at $1.2952 after increasing 0.5%. The Japanese yen fell 0.3% to 109.64 per dollar.

The offshore yuan rose 0.4% to 6.7884 per dollar.

Bonds

The yield on 10-year Treasuries rose one basis point to 2.75%. Australian 10-year bonds yielded 2.29%.

Commodities

West Texas Intermediate crude gained 1.2% to $53.2 a barrel. Gold was little changed at $1 284.40 an ounce.

ZAR/USD
16.55
(+0.78)
ZAR/GBP
20.92
(+0.37)
ZAR/EUR
18.93
(+0.67)
ZAR/AUD
11.62
(+0.40)
ZAR/JPY
0.16
(+0.47)
Gold
1807.86
(-0.06)
Silver
19.25
(-0.03)
Platinum
830.00
(+0.18)
Brent Crude
43.06
(+0.42)
Palladium
1963.00
(+0.31)
All Share
56374.05
(+1.52)
Top 40
52048.69
(+1.59)
Financial 15
10697.88
(+1.61)
Industrial 25
76413.30
(+1.19)
Resource 10
54358.32
(+2.14)
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