Asia Stocks Rebound as Middle East Concerns Fade: Markets Wrap

Asian stocks rebounded as the risk-off mood sparked by geopolitical tensions in the Middle East ebbed. The yen held losses.

Shares rose in Tokyo, Sydney and Seoul. Hong Kong futures tipped a firmer open. U.S. equity futures were flat after the S&P 500 Index rose for the third time in four sessions, erasing early losses, with heavyweight technology companies leading. Gold retreated from the highest in more than six years. Ten-year Treasury yields were around 1.80%. Crude oil fell below $63 a barrel in New York, after reaching the highest since April.

Investors turned their focus to improving trade relations with China planning to sign the first phase of its trade deal with the U.S. in Washington on Jan. 15, according to people familiar with the matter. Still, though the sudden escalation of tensions in the Middle East last week lost momentum, sentiment remains cautious.

“It’s wait-and-see mode here,” said Steve Chiavarone, a portfolio manager with Federated Investors. “How much, if at all, do things escalate with Iran and does it ultimately impact the global economic outlook? Right now, not so much. Could it change? Sure.”

Here are some events to watch for this week:

  • Federal Reserve officials Richard Clarida, John Williams, James Bullard and Charles Evans speak on Thursday.
  • The U.S. monthly employment report is due Friday.

These are moves in major markets:

Stocks

  • Topix index rose 0.8% as of 9:03 a.m. in Tokyo.
  • Australia’s S&P/ASX 200 Index added 0.9%.
  • South Korea’s Kospi index added 0.7%.
  • Hong Kong’s Hang Seng Index futures rose 0.6% earlier.
  • S&P 500 futures were little changed. The S&P 500 Index rose 0.4% in New York.

Currencies

  • The Japanese yen traded at 108.41 per dollar.
  • The offshore yuan traded at 6.9673 per dollar.
  • The Bloomberg Dollar Spot Index dipped.
  • The euro was at $1.1194.

Bonds

  • The yield on 10-year Treasuries held at 1.80%.
  • Australia’s 10-year bond yield was flat at 1.20%.

Commodities

  • West Texas Intermediate crude fell 0.5% to $62.94 a barrel.
  • Gold slipped 0.2% to $1,563.31 an ounce.

— With assistance by Randall Jensen, and Vildana Hajric

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