Reuters | Jan 15, 2015 05:34
By Shinichi Saoshiro
TOKYO (Reuters) - Asian stocks mostly edged up on Thursday after a significant rebound in oil and copper prices brought a semblance of calm, while the dollar regained ground lost on disappointing U.S. retail sales.
Spreadbetters saw the upward momentum for risk assets being retained in Europe, forecasting Britain's FTSE (FTSE) to open up by as much as 0.5 percent and Germany's DAX (GDAXI) and France's CAC (FCHI) both seen starting 0.6 percent higher.
Indian stocks rallied after the Reserve Bank of India yielded to signs of slowing inflation and delivered a surprise interest rate cut. The India NSE index (NSEI) rose 1.8 percent.
Equity gains in much of the region were less spectacular as global growth worries lingered after weak U.S. retail sales compounded concerns over an earlier plunge in copper prices.
"Consumers gain purchasing power when oil prices fall, but the fact that U.S. retail sales fell in December despite cheap oil has highlighted a serious deflation risk," said Chun Jung-hun, an analyst at Kiwoom Securities.
Copper skidded to a 5-1/2-year low on Wednesday as the recent decline in oil prices amplified fears about the state of the global economy. The industrial metal is generally considered a barometer of world demand.
After plunging 5.3 percent overnight, benchmark LME copper
Wednesday's data from the United States further capped risk appetite, with investors already feeling a chill from the World Bank's downgrade of its 2015 and 2016 economic forecasts.
U.S. retail sales recorded their largest decline in 11 months in December as demand fell almost across the board, tempering expectations for a sharp acceleration in consumer spending in the fourth quarter.
Oil prices retained a bulk of their gains after rebounding from near six-year lows overnight as traders turned away from bearish bets stoked by a global supply glut to cover expiring options. [O/R]
The technical nature of the rebound in oil prices kept markets cautious about the outlook.
"The question is whether the market sees the current decline as overdone and is now establishing a bottom or is resetting and will go again," Evan Lucas, market strategist at IG in Melbourne, said in note to clients.
"I see the latter as the most likely scenario – the oil rout is far from over and it looks to me like a dead cat bounce."
In currencies, the dollar nursed losses after the weaker-than-expected U.S. retail sales data pulled U.S. Treasury yields sharply lower on Wednesday. [FRX/]
The dollar crawled up 0.3 percent to 117.72 yen <USD/JPY> after going as low as 116.06 overnight, its lowest in a month.
Giving the dollar a bit of respite, the benchmark 10-year Treasury yield (U.S. 10-Year Bond Yield) was at 1.8758 percent after touching a 20-month trough of 1.7840 percent.
The disappointing U.S. data led the market to push further out the day when the Federal Reserve is likely to deliver its first interest rate increase, which many analysts had suspected could come in June.
The euro fetched $1.1775 <EUR/USD>, limping away from a nine-year low of $1.1728.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.