Global Markets Higher, but China Bucks the Trend

By Ese Erheriene Features Dow Jones Newswires

Equity markets were broadly higher in Asia on Monday, though Chinese stocks pulled back amid some concern about the pace of initial public offerings picking up.

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Over the weekend, Chinese regulators cleared as many as nine IPOs, putting some pressure on local stocks as investor attention turns toward new issues.

The Shanghai Composite fell 0.4%, while the Shenzhen Composite, which generally has more new listings, fell 0.7%.

Meanwhile, Chinese inflation data released Monday were in line with expectations in June and unchanged from May.

"Having eased in previous months, price pressures appear to have stabilized in June," said Julian Evans-Pritchard, China economist at Capital Economics. "Nonetheless, with slowing credit growth likely to weigh on economic activity in coming quarters we think that, volatility in food prices aside, inflation still has further to fall."

Most other Asia-Pacific stock markets gained, led by Japan, Australia and Hong Kong, boosted by the strong U.S. jobs report Friday and subsequent gains in the dollar.

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The Nikkei Stock Average finished morning trading up 0.7%, pushing back above the 20000 level after closing at its lowest level in three weeks on Friday. The yen softened Monday against the dollar, topping Yen114--a level not seen in two months--helping propel local exporter stocks.

Australia's S&P/ASX 200 rose 0.6% spurred by gains in bank stocks, while Hong Kong's Hang Seng jumped 1% after logging its worst week of 2017 by falling 1.6%. Index heavyweight HSBC rose 1.4%.

Elsewhere, benchmarks in Singapore and South Korea rose 0.5% and 0.3%, respectively.

The G-20 meeting made little impact on markets as global leaders displayed greater unity than expected.

Oil stocks, however, were lower following Friday's latest crude selloff--stoked by a rebound in the U.S. dollar, which recorded its best week of 2017, according to the WSJ Dollar Index.

Despite crude rising nearly 1% in Asian trading, oil companies' shares caught up with the end-of-week decline. Japan Petroleum Exploration fell 0.6%, Chinese oil major Cnooc was 0.7% lower in Hong Kong and Australia's Santos shed 1.9% to hit return to levels seen in early 2016.

A closely watched report released on Friday showed a rebound in U.S. oil-drilling activity. That is liable to weigh on prices in the near term, said ANZ Research.

Elsewhere--and after U.S. Treasury yields rose Friday--the Bank of Japan's end-of-week action kept domestic rates in check on Monday. The 10-year yield for Japanese government bonds was recently unchanged at 0.085%.

Central banks are set to remain in focus this week, with Federal Reserve chief Janet Yellen making semiannual testimony before congressional committees and the Bank of Canada widely expected to undertake its first rate increase in seven years.

Write to Ese Erheriene at ese.erheriene@wsj.com

Global stocks started the week slightly higher after a solid jobs report on Friday helped ease worries over the U.S. economy.

The Stoxx Europe 600 edged up 0.2% in the early minutes of trading Monday, with bank shares continuing to benefit from a recent climb in government bond yields. Asian markets mostly advanced, tracking gains overseas, while futures pointed to a 0.2% opening gain for the S&P 500 after shares of financial companies lifted the index to weekly gains.

Central banks are likely to remain in focus this week after signs that they might tighten policy put pressure on the government bond market. Federal Reserve Chairwoman Janet Yellen is set to offer semiannual testimony before congressional committees while the Bank of Canada is widely expected to undertake its first rate increase in seven years.

Yields on 10-year Treasury notes edged down to 2.388% Monday from 2.393% on Friday, their highest settlement in nearly two months, while 10-year German bund yields edged down to 0.567% from 0.569%. Yields move inversely to prices.

Earlier, equity markets were broadly higher in Asia on Monday, after a strong U.S. jobs report Friday boosted the dollar and U.S. stocks.

Japan's Nikkei Stock Average rose 0.8% after closing at its lowest level in three weeks on Friday. The dollar strengthened against the yen, topping Yen114--a level not seen in two months--which helped propel local exporter stocks.

The Bank of Japan raised its view on five of the nation's nine regional economies in a report released Monday, but Bank of Japan Gov. Haruhiko Kuroda also said he was ready to make appropriate policy adjustments if necessary to maintain inflation, putting the currency under pressure.

Hong Kong's Hang Seng added 0.7% as index heavyweight HSBC advanced, while Australia's S&P/ASX 200 rose 0.4%, spurred by gains in bank stocks.

Chinese shares were held back by concern about the pace of initial public offerings picking up. Over the weekend, Chinese regulators cleared as many as nine IPOs, putting some pressure on local stocks as investor attention turns toward new issues. The Shanghai Composite fell 0.2%, while the Shenzhen Composite, where more new companies list, fell 0.6%.

Data released Monday showed China's producer prices held steady in June, ending a three-month deceleration, while consumer inflation was also unchanged from May.

The start of trading was delayed in both India and Indonesia on Monday morning for what is being said were separate technical issues. Investors seemed unmoved as India's Sensex stock index climbed to record highs Monday, rising 0.8%. Indonesia's JSX edged down 0.2%.

Megumi Fujikawa and Kevin Kingsbury contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

July 10, 2017 03:53 ET (07:53 GMT)