Asia-Pacific Markets Mull Over U.S. Tax Reform and Russia Probe -- Update

Asia-Pacific stock markets had a largely muted start to the week, though some buying built into midday, as investors mulled over the U.S. Senate's passing of a tax-reform proposal and the special counsel's probe of President Donald Trump's election campaign.

Former national security adviser Michael Flynn pleaded guilty Friday to lying to federal investigators. In a Monday morning note to clients, ANZ bank said Mr. Flynn was, by himself, not important for markets. "But the fact that he is now cooperating with the investigation and could implicate key people further up the chain is [important]."

The probe had an impact on Friday's market action in the U.S., aggravated in part by what later was proved to be an erroneous report about Mr. Flynn and the investigation.

S&P 500 futures were recently up 0.6%. The U.S. index finished down 0.2% Friday.

Many Asia-Pacific indexes were within 0.3% of Friday's closes Monday, but the U.S. dollar jumped. The WSJ Dollar Index was recently up 0.3%, with the currency up a half yen versus late-Friday New York levels at Yen112.75.

But that didn't help the Nikkei, which finished morning trading down 0.1% despite 1% to 2% gains in oil firms Inpex and Japan Petroleum. But precision-instrument makers experienced declines, with Olympus down 3.4%.

One morning highlight was Hong Kong's Hang Seng Index.

Falling every day last week and logging its first five-session slide in 13 months, the benchmark ended the morning up 0.7% as oil stocks rose there as well. That was despite oil pulling back about 0.5% in Asia following crude's end-of-week jump, which was stoked by a weaker dollar.

Meanwhile, index heavyweight Tencent rebounded 1.8% and insurer Ping An, which also pulled back notably as November ended, rose 2.5%. "The weakness in Tencent and Ping An is attracting interest from value buyers, " said Castor Pang, head of research for Core Pacific-Yamaichi International.

Tech in general also started the week solidly. After declines last week, benchmarks in Korea and Taiwan rose about 0.5%, while the large-cap CSI 300 in China ended the morning up 0.8%.

The S&P/ASX 200 was down 0.1%. There were gains for commodity companies, led by big miners BHP Billiton and Rio Tinto, but continued weakness for the country's major banks. They're facing a sweeping investigation, now a 12-month inquiry is being set up following a string of finance-industry scandals.

Meanwhile, Indonesia's stock benchmark rebounded 1% in early trading after seeing a nearly 100-point downward revision at Thursday's close, and was recently at 6015. But the JSX is up 14% this year and has been setting record closing highs of late.

Also, bitcoin pulled back from its latest record high near $12,000 set Sunday afternoon in the U.S. but it remained higher than the $9500 levels in Asia on Friday afternoon. Steady gains during the rest of Friday's global session--helped by the looming planned launch of bitcoin futures in the U.S.--got it to $11,000 at day's end.

It stuck around that level before starting to rally as daybreak neared Sunday on the U.S. East Coast, briefly topping $11,800. It then dropped swiftly, nearly hitting $10,500 within two hours. Bitcoin was recently back up to $11,300.

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

(END) Dow Jones Newswires

December 03, 2017 23:36 ET (04:36 GMT)