(July 6): Asian shares advanced and US equity-index futures held onto Friday’s gains as technology stocks extended their rebound. Oil edged lower.
MSCI’s Asia Pacific Index climbed 0.3%, with more than two shares rising for every one that declined. South Korean shares led regional gains, with the nation’s benchmark Kospi index climbing 1.8%.
Sentiment towards chipmakers remained robust with Nvidia Inc’s server assembly partner Hon Hai Precision Industry Co reporting stronger-than-expected sales. SK Hynix Inc shares rose 1.4% ahead of this week’s listing of US$29 billion ($37.47 billion) American depositary receipts. Samsung Electronics Co jumped 4% after a report the company is considering increasing some chip prices.
Oil slipped as energy flows through the Strait of Hormuz persisted and Opec+ signalled higher supplies. Brent fell 0.7% to US$71.65 a barrel as shipping through the US-protected corridor in the waterway showed signs of recovering. Opec+ members also backed another modest rise in collective quotas for next month. The dollar and Treasuries were little changed in early trading.
Markets entered the second half of the year on a cautious footing as investors weigh the fallout from the Iran war’s energy shock and whether the artificial intelligence (AI)-driven rally can be sustained. Following last week’s recovery from a two-day rout in chipmakers, attention has shifted to earnings season for signs that massive spending on AI infrastructure is translating into profits.
“Tech stocks and tech-heavy indices in the US and Asia have entered a period of consolidation ahead of the Q2 earnings season,” said Tony Sycamore, an analyst at IG Markets in Sydney.
See also: European stocks rally to cap best week since May as US futures rise
Tech stocks remain in focus after losses last week in the US were fuelled by concerns that the AI-driven rally had run ahead of itself. Sentiment appeared to stabilise with equity-index futures for Wall Street gauges holding their gains from Friday, when the US markets were shut for a holiday.
Futures for the S&P 500 Index rose 0.5%, while those for the Nasdaq 100 climbed 1.2%.
In other corners of the market, gold gave up its initial gains to trade around US$4,175 an ounce. Silver rose 0.4% to about US$62.74 an ounce.
See also: Stocks stabilise after tech-led sell-off, gold up
Meanwhile, Goldman Sachs Group Inc revised its yen forecast to 165 per dollar in a year’s time from 155 previously. The Japanese currency traded at 161.54 per dollar in early Asian trading.
“The broader macro backdrop of higher-for-longer US yields, low recession risk, lingering fiscal concerns, and only gradual BOJ hikes strongly argues for continued depreciation pressure on the currency,” Goldman Sachs strategists including Kamakshya Trivedi wrote in a note.
The won was also in focus. The Korean currency was little changed after rebounding late Friday from its weakest level against the dollar since 2009 after a person familiar with the matter said the nation’s officials were preparing for currency flows related to SK Hynix’s ADR offering.
The move to 24-hour trading for the currency is the centrepiece of Seoul’s years-long push to improve foreign investors’ access to local markets and bolster the case for an upgrade to MSCI Inc’s developed-market index.
Treasuries were steady as cash trading resumed following Friday’s holiday. The US sovereign debt market faces a test of investor demand for longer maturities this week, with auctions of 10- and 30-year Treasuries highlighting an otherwise light week for economic events.
The auctions come as minutes from the Fed’s June meeting will be closely parsed after Chair Kevin Warsh tempered his hawkish inflation stance last week. Traders trimmed expectations that a hike was imminent following softer-than-expected jobs data and Warsh’s comment that inflation pressures had eased.
Corporate news:
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- Nvidia Corp’s server assembly partner Hon Hai Precision Industry Co reported a bigger-than-expected 40% jump in quarterly sales and said AI demand is growing further.
- Samsung Electronics Co plans to raise average third-quarter DRAM prices by about 20% from the previous three months and has verbally notified some customers, China Business News reported on Saturday, citing unidentified people familiar with the matter.
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.5% as of 9.41am Tokyo time
- Hang Seng futures fell 0.2%
- Nikkei 225 futures (OSE) fell 0.2%
- Japan’s Topix rose 0.8%
- Australia’s S&P/ASX 200 was little changed
- Euro Stoxx 50 futures were little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1440
- The Japanese yen fell 0.1% to 161.53 per dollar
- The offshore yuan was little changed at 6.7840 per dollar
Cryptocurrencies
- Bitcoin rose 1.4% to US$63,570.06
- Ether rose 0.5% to US$1,784.99
Bonds
- The yield on 10-year Treasuries declined one basis point to 4.47%
- Japan’s 10-year yield advanced 1.5 basis points to 2.795%
- Australia’s 10-year yield was little changed at 4.79%
Commodities
- West Texas Intermediate crude fell 0.5% to US$68.33 a barrel
- Spot gold rose 0.2% to US$4,184.99 an ounce
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