Most Asian Shares Rise, Gold Touches Record High: Markets Wrap

(Bloomberg) — Most Asian stocks rose following gains in US equities, while gold touched a record high as Middle-East tensions stoked demand and investors positioned for the US presidential election.

China’s CSI 300 Index climbed after the nation’s banks cut their benchmark lending rates, adding to optimism over recent stimulus measures. Shares also advancec in South Korea, Taiwan and Australia, but fell in Hong Kong. US equity futures gained after the S&P 500 notched up a sixth straight weekly increase, boosted by corporate earnings and signs of economic resilience.

Financial markets are being shaped by wagers on the health of the US and Chinese economies on the one hand, and the impact of hostilities in the Middle East and geopolitics on the other. The decision by Chinese banks to cut lending rates came after officials have implemented a series of measures to revive economic growth and bolster the housing market. 

China’s banks lowered their one-year loan prime rate, on which most new and outstanding loans are based, to 3.10% from 3.35%, and reduced the five-year gauge to 3.60% from 3.85%.

“It is not a big positive surprise, but rather within the expected range — we believe that the market’s sense of relief will spread and provide support for stock prices,” said Chunai Jean, senior strategist at Daiwa Asset Management in Tokyo. “We will continue to monitor the schedule of the Standing Committee of the National People’s Congress and the fiscal spending measures expected to be implemented at the meeting.”

Gold climbed to hit an all-time high of about $2,730 an ounce, while silver, palladium and platinum also rose. In the Middle East, Israel is discussing its attack on Iran after a Hezbollah drone exploded near Prime Minister Benjamin Netanyahu’s private home at the weekend. Investors are also boosting gold holdings ahead of what’s expected to be a tight US presidential election. 

The yen rose against the dollar as traders positioned for Japan’s parliamentary election scheduled for Sunday. The ruling coalition of the Liberal Democratic Party and Komeito may fall below the threshold of 233 seats needed for a parliamentary majority, according to an Asahi poll.

Finance ministers and central bank chiefs from around the world gather in Washington this week for the annual meeting of the International Monetary Fund and World Bank. Hanging over the meeting is the grinding Russia-Ukraine war and a toss-up US presidential election that offers starkly different economic outcomes for the world. 

Bitcoin flirted with $70,000, a level last seen since June, amid a spurt of demand for dedicated US exchange-traded funds.

In US earnings this week, Tesla Inc. faces questions on its production targets and regulatory challenges after the unveiling of its much-hyped Cybercab failed to enthuse investors and quell concerns over its recent vehicle sales.

Boeing Co. will also have to sooth investors increasingly concerned over production delays, depleted financial resources and labor strife. Striking workers will vote on Oct. 23 to ratify a tentative agreement on a new contract the company and their union reached at the weekend, including a wage increase of 35% spread over four years. 

Investors are positioning for the US election in about two weeks as odds tilt toward Trump winning the White House and Republicans controlling Congress. Traders have already begun ramping up bets on assets which had thrived in the wake of the former president’s 2016 victory, and are now looking to the impact on proposed policies including a lift in trade tariffs.

Here are some highlights of the coming week: 

• IMF and World Bank annual meetings in Washington Monday through Oct. 26
• BRICS summit in Kazan, Russia, hosted by Russian President Vladimir Putin. Among those attending are the leaders of Brazil, India and China. Oct. 22 through Oct. 24.
• Canada rate decision, South Africa CPI, Boeing, Tesla, Deutsche Bank earnings on Oct. 23; the start of trading in subway operator Tokyo Metro is set to be the biggest IPO in Japan since 2018
• Eurozone,, UK, US PMIs
• German IFO data, Tokyo CPI, Russia’s central bank meets

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 12:39 p.m. Tokyo time
• Nikkei 225 futures (OSE) rose 0.2%
• Japan’s Topix was little changed
• Australia’s S&P/ASX 200 rose 0.7%
• Hong Kong’s Hang Seng fell 0.2%
• The Shanghai Composite rose 0.8%
• Euro Stoxx 50 futures were little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0868
• The Japanese yen rose 0.2% to 149.16 per dollar
• The offshore yuan was little changed at 7.1127 per dollar

Cryptocurrencies

• Bitcoin rose 0.2% to $68,901.45
• Ether rose 0.9% to $2,736.05

Bonds

• The yield on 10-year Treasuries was little changed at 4.08%
• Japan’s 10-year yield declined one basis point to 0.960%
• Australia’s 10-year yield declined two basis points to 4.29%

Commodities

• West Texas Intermediate crude rose 0.5% to $69.59 a barrel
• Spot gold rose 0.4% to $2,732.80 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Matthew Burgess, Chris Bourke, Sybilla Gross, Sunil Jagtiani and Winnie Hsu.

©2024 Bloomberg L.P.