Most Asian markets started the week on a positive note Monday, with Shanghai returning from a week-long break with healthy gains as traders looked past a surprise drop in US jobs. But geopolitical tensions returned with another feared North Korea long-range missile test reportedly in the planning and US President Donald Trump suggesting that talking to Kim Jong-Un’s regime was a waste of time and “only one thing will work”.
The Turkish lira was sitting close to record lows against the dollar as Ankara and Washington each cancelled visa services for the other in a deepening diplomatic row. Wall Street provided a meek lead for Asia, with the Dow and S&P 500 retreating from record highs in response to figures on Friday showing the US lost 33,000 posts in September the first drop since 2010.
However, while the fall compared with a forecast gain of 75,000, analysts pointed to improving wage growth and a further dip in the overall unemployment rate. They added that the figure was likely an aberration owing to one-off events in the hurricanes that hit Florida and Texas.
Shanghai ended 0.8 percent higher as investors returned from the week-long Golden Week celebrations and reacted for the first time to the Chinese central bank’s decision to cut the amount of cash banks must hold in reserve as part of a push to help small businesses.
Sydney rose 0.5 percent, Wellington was up 0.4 percent and Singapore gained 0.1 percent while Manila put on 0.2 percent. However, Hong Kong retreated 0.5 percent on profit-taking after ending Friday at a 10-year high. Tokyo, Seoul and Taipei were closed for public holidays. In early European trade London dipped 0.1 percent but Paris gained 0.1 percent and Frankfurt put on 0.2 percent.
Eyes are now turning back to the US-North Korea standoff after a Russian lawmaker said Pyongyang was planning to fire another missile, which could hit the US west coast. “There was news over the weekend that ‘the little rocket man’ in North Korea is now capable of launching a missile that can hit the US mainland,” Shane Channel, equity and derivatives adviser at ASR Wealth Advisers, said in a commentary referring to Trump’s name for Kim.
That, added to Trump’s remark, led to a return to safe-haven assets with gold up more than one percent at $1,285 on Monday. The dollar held up against its major peers as markets continue to bet on a third interest rate hike this year, likely in December.
Key figures around 08:20 GMT
Shanghai – Composite: UP 0.8 percent at 3,374.38 (close)
Hong Kong – Hang Seng: DOWN 0.5 percent at 28,326.59 (close)
Tokyo – Nikkei 225: Closed for a public holiday
London – FTSE 100: DOWN 0.1 percent at 7,513.00
Euro/dollar: DOWN at $1.1720 from $1.1736 at 2100 GMT on Friday
Dollar/yen: UP at 112.67 yen from 112.65 yen
Pound/dollar: UP at $1.3100 from $1.3069
Dollar/Turkish lira: UP at 3.7002 lira from 3.6147 lira
Oil – West Texas Intermediate: UP 18 cents at $49.47 per barrel
Oil – Brent North Sea: UP seven cents at $55.69 per barrel
New York – DOW: FLAT at 22,773.67 (close)