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Global Markets: Asia stocks shake off G7 jolt, look to U.S.-North Korea summit outcome

Reuters  |  TOKYO 

By Shinichi Saoshiro

TOKYO (Reuters) - stocks shook off initial modest losses and edged up on Monday ahead of an historic U.S.-summit that investors hope might pave the way to ending a nuclear stand-off on the

Stocks wobbled in early trade after U.S. raised fresh fears of a global trade war when he backed out of a joint communique over the weekend, in a blow to the group's efforts to show a united front.

The futures were almost flat after dropping as much as 0.3 percent.

MSCI's broadest index of shares outside slipped early but was last up 0.25 percent. Hong Kong's Hang Seng gained 0.3 percent while the Shanghai Composite Index fell 0.3 percent.

South Korea's added 0.5 percent, and Japan's Nikkei climbed 0.7 percent.

"What took place at the weekend was within the scope of earlier expectations. And while the countries disagreed on trade, they did seem to show a unified front on the North Korean issue, so there is also a positive element from the affecting risk sentiment," said Masahiro Ichikawa, at

After the meeting, the U.S. withdrew his support for its communique and raised fresh trade concerns by taking aim at Canadian amid a spat over import tariffs.

"The G7 meeting in reiterated the growing rift between and its allies over free trade," wrote Tai Hui, for Pacific at

"Business confidence, and subsequently capital spending, is at risk if this tension continues through the summer," he said, adding that central meetings will be critical events this week.

Trump and North Korean leader 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 being lifted.

"There are many obstacles that will need to be overcome if a deal between the US and is to be agreed, not least a lack of trust between the two sides," Gareth Leather, senior economist at Capital Economics, wrote in a note to clients.

"Nevertheless, the improvement in ties between the US and North Korea has at least made the possibility of a deal, which sees economic sanctions on North Korea being lifted, seem a little less far-fetched."

Investors also got prepared for a raft of other key events.

The Federal Reserve holds a two-day meeting starting on June 12, and it is widely expected to raise interest rates for the second time this year. The focus is on whether the central will hint at raising rates a total of four times in 2018.

The European Central meets on June 14, when it could signal intentions to start unwinding its massive bond purchasing programme.

The Canadian dollar, which has been dogged by fears Trump may scrap the North American Free Trade Agreement (NAFTA), fell 0.25 percent to C$1.2959 per dollar.

The euro, which was lifted last week amid the prospect of the ECB signalling its exit from easy policy, was 0.25 percent higher at $1.1801 .

The dollar erased earlier losses to trade 0.2 percent higher at 109.76 yen as regional equities gained and the U.S. Treasuries yields rose ahead of a raft of auctions.

The dollar index against a basket of six major currencies was 0.05 percent lower at 93.498.

were mixed, caught between the downward pull of rising Russian production and U.S. oil drilling activity, and upward pressure from strong demand.

Brent crude futures were up 0.1 percent at $76.55 a barrel. U.S. crude futures. Slipped 0.15 percent to $65.66 a barrel.

Bitcoin struggled near two-month lows after South Korean cryptocurrency exchange Coinrail said it was hacked over the weekend, raising concerns about security at small- to mid-sized virtual currency exchanges.

(Reporting by Shinichi Saoshiro; Editing by & Shri Navaratnam)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, June 11 2018. 10:39 IST