Global Markets Calm After Rebounding Earlier in the Week -- Update

By Kenan Machado Features Dow Jones Newswires

Global equities took a breather from this week's rebound on Wednesday, with stock indexes across Asia-Pacific lacking direction following muted overnight performance on Wall Street.

Continue Reading Below

The Shanghai Composite Index pared early losses to trade 0.2% lower at the midday break, with large caps succumbing to selling pressure after recent gains. Stocks were higher in Hong Kong, with the Hang Seng Index up 0.6%.

Elsewhere in the region, stock moves were mixed, with New Zealand's NZX 50 rising 0.4%, on track for another fresh closing high, while Singapore's Straits Times Index was off 0.9%.

"There is a bit of a pause for reflection really," said Chris Weston, chief market strategist at IG Markets. In the U.S., the Dow Jones Industrial Average ended flat, while the Nasdaq was down 0.1%.

Stock benchmarks in China, Australia, South Korea and Hong Kong are up 1% so far this week, as investors found value in high-growth stocks following last week's pullback, which many analysts believed was overdue.

"We have had an uncharacteristic bull market in the past few months," said Michael Parker, Asia-Pacific equity strategist at Bernstein. "During a bull market, the sharper the one-day selloff, the better the buying opportunity."

Continue Reading Below

Markets rebounded this week as short positions over tensions in the Korean Peninsula unwound. However, caution remains ahead of joint U.S.-South Korean military exercises next week, analysts say.

Still, the South Korean Kospi outperformed as traders returned from a public holiday to catch up with the region's earlier gains. The benchmark index was up 0.5% after opening about 1% higher.

Index heavyweight Samsung Electronics led gains, surging as much as 3.1%; retail and travel stocks outperformed as well. Lotte Tour Development was up 2.7% and Korean Air Lines added 0.8%.

On Tuesday, South Korea's president called for renewed talks with the North, saying that the U.S. would need Seoul's consent for any military action on the Korean Peninsula, which helped to ease tensions.

In Hong Kong, improved risk-taking appetite prompted strong buying among Chinese banking and casino gambling stocks. Among the nation's biggest lenders, China Construction Bank gained 2.2% and Industrial & Commercial Bank of China added 1.8%.

Driven by its bullishness on China-related stocks, especially banks, broker CIMB sharply raised its end-2018 target for the Hang Seng Index to 33600, implying an upside of more than 23%.

Meanwhile, messaging giant Tencent Holdings, which is scheduled to release its second-quarter results later Wednesday, rose as much as 1.8% before ending the morning session up 0.9%.

In Japan, the Nikkei Stock Average was flat, even as the U.S. dollar recovered further against the yen to Yen110.64 versus Yen110.36 at Tuesday's Tokyo stock-market close.

Broad gains in the dollar came after data from the U.S. Commerce Department showed retail sales rising 0.6% from a month earlier, the biggest jump since December, with much of that coming from internet sales.

Australia's S&P/ASX 200 was also flat, tracking the performance of metals prices during Asian trade, with copper largely unchanged, while iron ore was slightly higher.

Shares of Woodside Petroleum stood out, gaining 3.3% even as first-half earnings didn't provide any positive surprises. The company's strong operating cash flow beat RBC Capital Market's expectations, said the bank's oil and gas analyst Ben Wilson.

Crude-oil prices were higher ahead of weekly supply data from the U.S. Department of Energy. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the week showed a 9.2-million-barrel decrease in crude supplies. Nymex crude-oil prices were recently up 0.5%, while Brent prices added 0.6%.

John Wu contributed to this article.

Write to Kenan Machado at kenan.machado@wsj.com

(END) Dow Jones Newswires

August 16, 2017 01:17 ET (05:17 GMT)