Global equity markets move higher
-- S&P 500 poised to open up
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-- Haven assets retreat
Global equity markets retraced some of last week's pullback, as robust Asian earnings and reduced fears of military conflict between the U.S. and North Korea lifted buying interest.
The Stoxx Europe 600 was up 0.8% around 11 a.m. GMT on Monday. On Wall Street, futures indicated the S&P 500 was poised to open 0.6% higher.
Markets responded positively to the reduced risk of fighting in the Korean Peninsula. Late Sunday, U.S. Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson said the Trump administration was still trying to achieve the "irreversible denuclearization" of North Korea through diplomacy.
"The move up [in markets] today is being driven by the fact there's been a little bit of a sigh of relief that you haven't seen further escalation," said Supriya Menon, senior multiasset strategist at Pictet Asset Management.
Also supporting equities were weak inflation readings in the U.S. on Friday, prompting markets to lower the probability of the Federal Reserve raising interest rates in December.
Federal-funds futures, used by investors to place bets on the Fed's rate-policy outlook, showed a roughly 37% chance of a rate increase by the end of 2017 on Monday, down from 48.3% a month ago, according to CME Group data.
The U.S. 10-year Treasury yield rose to 2.220% Monday from 2.191% Friday. Yields move inversely to prices.
The Fed will release minutes from its most recent meeting on Wednesday, and investors will scan them for clues on the central bank's interest rate path. The release could also provide a further look at the Fed's plans for balance sheet unwinding.
Hong Kong's Hang Seng Index rose 1.4% Monday, after registering its biggest one-week decline since December. In China, the Shanghai Composite was up 0.9%. Australia's S&P/ASX 200 added 0.7% and Singapore's Straits Times Index rose 0.9%, with buying across all sectors.
Stephen Corry, chief investment strategist at LGT in Hong Kong, said earnings were beating "more optimistic" forecasts in Asia, where roughly half the companies, excluding those in Japan, have already posted results. He said last week's market pullback therefore represented an opportunity to buy riskier assets.
Among Monday's top gainers, shares of China Unicom surged 5.6% in Hong Kong after the telecom giant said late Friday it expected to report a 69% jump in first-half net profit because of strong demand for high-speed telecommunication services.
Investors moved away from so-called haven assets as the market bounced back. Gold was down 0.5% at $1,287.10 a troy ounce. The yen fell 0.5% against the dollar. A stronger yen hurts the competitiveness of Japanese exports.
The WSJ Dollar Index, which measures the greenback against a basket of currencies, rose 0.3%.
Japan reported that its economy grew at a faster-than-expected pace of 4% in the April-June period Monday on strong household spending. The benchmark Nikkei Stock Average was down 1%.
In South Korea, the Kospi rebounded 0.6%, after it fell 3.2% last week, in its largest one-week percentage decline since June 2016. Shares of Samsung Electronics rose 0.9% and Korean Air added 0.7%.
Among sectors that outperformed, Chinese car makers listed in Hong Kong got a boost on solid sales in the world's largest car market. Geely Automobile rose 4.2% and Brilliance China was up 3.5%.
Fiat Chrysler Automobiles was one of the largest gainers in Europe, up 5.2% Monday, on news Chinese investors are interested in purchasing the Italian-American auto maker.
Joanne Chiu and Deborah Ball contributed to this article.
Write to Kenan Machado at firstname.lastname@example.org
(END) Dow Jones Newswires
August 14, 2017 07:20 ET (11:20 GMT)
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