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Asia: Stocks fall on US consumer woes, bonds rise

Friday, May 12, 2017 - 12:19

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[SYDNEY] Asian stocks declined on concern about the appetite of US consumers to keep spending, while bonds and gold extended gains.

Consumer discretionary shares paced losses on the MSCI Asia Pacific Index as equities retreated in Japan, Australia and South Korea. Worries that Americans continue to hold back from buying goods in the world's largest economy dragged the S&P 500 Index lower on Thursday. Gold extended an advance while Australian government bonds tracked gains in Treasuries. Oil approached US$48 a barrel.

Global equities are trading near a record high amid optimism the economy can weather higher US interest rates. Weak sales at American department stores underscored rising angst that the biggest part of the US economy isn't picking up the pace enough to raise growth rates. US retail sales data due later Friday will give investors a fresh read on the situation.

Chinese shares are heading for a fifth week of declines as a rout that's erased more than US$560 billion from the value of equities makes them the world's worst performers since mid-April.

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Market voices on:

In Hong Kong, the Hang Seng Index traded flat. China's government has made preparations to support the city's stock market if needed to create a positive atmosphere before July 1, when Xi Jinping is expected to visit for the first time as president to mark 20 years of Chinese rule.

Here are key events investors will be watching:

Malaysia's central bank releases its policy decision.

Chicago Fed President Charles Evans is due to speak in Dublin at a conference that will also host European Central Bank policy maker Philip Lane.

In addition to retail sales data, the US is also scheduled to report on consumer prices on Friday.

Chinese President Xi Jinping hosts world leaders including Russian President Vladimir Putin at a summit promoting his US$500 billion trade-and-infrastructure plan. Called the Belt and Road Initiative, the summit begins Sunday and will showcase Mr Xi's plans to remake global trade patterns in China's favour.

Stocks

The MSCI Asia Pacific Index slipped 0.4 per cent as of 12:11pm in Tokyo, retreating from a 23-month high on Thursday and paring its gain for the week to 1.2 per cent.

Japan's Topix index fell 0.7 per cent after reaching the highest level since December 2015 in the previous session. The gauge is up 1.6 per cent for the week.

Australia's S&P/ASX 200 Index retreated 0.8 per cent and South Korea's Kospi index dropped 0.4 per cent after closing Thursday at an all-time high.

The Shanghai Composite Index rose 0.5 per cent, paring its weekly loss to 0.9 per cent.

S&P 500 e-mini contracts were down 0.2 per cent after the underlying gauge slid 0.2 per cent Thursday. The Stoxx Europe 600 fell 0.5 per cent, after gaining 0.2 per cent Wednesday to the highest level since August 2015.

Currencies 

The yen rose 0.2 per cent to 113.65 per US dollar, paring its decline for the week to 0.8 per cent. The Aussie was little changed at 73.78 US cents, on course for a fourth weekly slide against the greenback.

The kiwi dollar dropped 0.2 per cent to 68.39 US cents, extending yesterday's decline triggered by dovish comments from New Zealand's central bank.

Bonds

The yield on 10-year Treasury notes was down one basis point to 2.38 per cent, after falling three basis points on Thursday.

Yields on 10-year Australian government bonds fell three basis points to 2.63 per cent.

Commodities

Oil rose 0.2 per cent to US$47.93. Crude is up for a third day, leaving the worst of last week's rout behind for now, as US stockpiles fell and two Opec members said there's a consensus to extend output cuts.

Gold advanced 0.2 per cent to US$1,226.85 an ounce after a 0.5 per cent advance Thursday.

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