Asian stocks gave up gains; Australian retail sales lower than expected

<p>Asian stocks gave away their gains today as Spanish borrowing costs firmed and the Chinese stimulus speculation failed to materialise in any firm policy announcements, […]</p>

Asian stocks gave away their gains today as Spanish borrowing costs firmed and the Chinese stimulus speculation failed to materialise in any firm policy announcements, at least for the time being.

The regional MSCI Asia Pacific index was 1.1% lower in early afternoon Tokyo trading. Futures on the S&P500 were last pointing to a gain of around 0.5%.

The Australian dollar fell on weaker than expected retail sales numbers, down 0.2% for April compared to the prior corresponding period which was below market expectations of 0.2% growth.

Expectations of a rate cut are rising when the Reserve Bank of Australia (RBA) meets early next week. The Australian dollar is likely to remain at depressed levels until the meeting. It last traded at 97.93 US cents. The euro fell back below 125 US cents, last at 124.69 while the dollar yen remained in its tight trading range, last at 79.45.

The S&P GSCU measure of 24 commodities was 0.3% lower today, led by losses across the board. Copper is holding ground at around US$3.44/lb while gold continues to languish at US$1550/oz.

Meanwhile, copper producer China Nonferrous Mining pulled a planned Hong Kong IPO of up to $313m today due to the worsening market conditions and lower commodity prices, according to sources close to the deal.

The company, which has operations in Zambia, originally planned to finish taking orders for the deal on May 24, but extended the book-building period to this week.

Elsewhere and on a slightly lighter note, Australia’s most popular beer for decades, Victoria Bitter (VB), lost its crown, with XXXX Gold from Queensland now officially the nation’s biggest-selling brew.

The news is important for SABMiller which recently acquired the Fosters beer business – the brewer of VB. SABMiller hopes to use the Australian operation for further expansion into Asia but today’s numbers means there is plenty of work to do in stabilising the recent decline in its business. Japan’s Asahi Group was last trading 0.2% lower.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.