Australian economy expands in the first quarter
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Asian shares ended Wednesday without any clear direction, as investors awaited several potentially significant events this week.
The planned public testimony by former FBI Director James Comey on Thursday continued to stoke concerns about U.S. political instability. Additionally, investors' showed their nerves ahead of a European Central Bank policy meeting and the U.K. general election, both scheduled for Thursday.
The trio of risk events have been "sufficient to keep markets on the defensive," OCBC Bank said in a note Wednesday. "For today, Asian bourses may be content to tread water."
Australia's S&P/ASX 200 ended flat, but losses were pared after Australia's first-quarter GDP data grew by 1.7% (http://www.marketwatch.com/story/australias-economy-expands-in-first-quarter-2017-06-07) year over year, beating estimates of a 1.6% expansion.
The Nikkei Stock Average ended up nearly 5 point at 19,984.62, with modest gains despite a 0.2% gain in the yen against the dollar on safe-haven buys into the currency.
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Japanese stocks were also dragged down by interest-rate-sensitive insurers, with MS&AD Insurance Group Holdings (8725.TO) down 1.7%.
Stocks in China, meanwhile, were markedly higher, after some listed companies sent notices to employees that markets saw as offering a short-term boost to share prices.
Since Tuesday afternoon, 10 companies, including Qingdao Kingking Applied Chemistry (002094.SZ) , issued statements to the effect that the company's controlling shareholders were encouraging employees to buy shares and would compensate them should losses occur.
The Shanghai Composite Index rose 1.2%, while the Shenzhen Composite Index gained 2.2%.
In Hong Kong, the Hang Seng Index shed 0.1%. But smartphone audio components supplier AAC Technologies (2018.HK) surged 13.7% on its trading resumption. The company's shares were battered after short-seller Gotham City in May accused it of dubious accounting practices, allegations the company has repeatedly denied.
Events took an interesting turn on Tuesday, when another short seller, Anonymous Analytics, backed the Apple supplier with a report titled "Hong Kong Deserves A Better Hero." It criticized Gotham City's earlier report on AAC as "grossly misleading." The Anonymous report came just hours before AAC hosted a news briefing to further rebut Gotham's allegations.
In currency markets, the Korean won came under pressure against the U.S. dollar, following a stock market holiday Tuesday and amid Korean investors catching up with the risk-aversion sentiment. The dollar was up 0.3% at 1120.00 won, though the Kospi shrugged off the favorable currency winds. The Kospi fell 0.4%.
Meanwhile, the yield on the benchmark 10-year U.S. government note closed overnight at the lowest level since Nov. 10, while London spot gold was up 1% so far this week.
"The ongoing rally in bonds and gold plus the weak dollar is interesting," said Ric Spooner, chief market analyst at CMC Markets. "It suggests caution ahead of this week's major risk events."
Elsewhere, crude oil faced selling pressure in Asia, after posting gains in the U.S. session following another upward revision of production estimates for the year by the U.S. Energy Information Administration. The EIA now expects U.S. crude output rise to 9.33 million barrels this year as oil digging operations expand.
July WTI fell 11 cents to $48.08 a barrel, while Brent for August delivery was 8 cents lower at $50.04 a barrel.
(END) Dow Jones Newswires
June 07, 2017 05:51 ET (09:51 GMT)