Asian stocks mixed on global economic growth data, Fed monetary policy

Shares in Shanghai rose after Chinese manufacturing data exceeded estimates, while stocks in Japan pared declines as the yen weakened.
Shares in Shanghai rose after Chinese manufacturing data exceeded estimates, while stocks in Japan pared declines as the yen weakened. PHOTO: BLOOMBERG

HONG KONG (BLOOMBERG) - Asian equities were mixed as investors assessed the strength of global economic growth and the path for US monetary policy. The British pound dropped amid election concerns.

Shares in Shanghai rose after Chinese manufacturing data exceeded estimates, while stocks in Japan pared declines as the yen weakened.

The Shanghai Composite Index climbed 0.5 per cent. The manufacturing purchasing managers index remained at 51.2 for a second straight month in May, compared with a median estimate of 51 in a Bloomberg survey of economists.

Hong Kong's Hang Seng gained 0.1 per cent, while the Hang Seng China Enterprises Index added 0.1 per cent.

Japan's Topix fell 0.1 per cent, paring an early loss of as much as 0.4 per cent. Australia's S&P/ASX 200 rose 0.2 per cent, while South Korea's Kospi added 0.2 per cent.

Singapore shares opened lower on Wednesday (May 31), with the benchmark Straits Times Index at 3,202.12 in early trade, down 0.08 per cent, or 2.67 points.

The British pound dropped for the first time this week as a poll showed Mrs Theresa May's Conservative Party may miss a majority. Oil extended losses. The yield on 10-year Treasuries edged higher after Tuesday's declines.

The pound dropped 0.3 per cent to US$1.2821 at 10.30am in Tokyo. The euro fell 0.1 per cent. The yen weakened 0.1 per cent to 110.94 per US dollar after rising 0.4 per cent on Tuesday. The South Korean won strengthened 0.2 per cent.

The Bloomberg Dollar Spot Index rose 0.1 per cent, after trading little changed in the previous two sessions.

Oil dropped 0.5 per cent to US$49.43 a barrel after retreating 0.3 per cent in the previous session. Opec and Russia's deal last week to extend output limits through March was met with a selloff as it did not include deeper cuts, a plan for the rest of 2018 or a new ally.

While equity benchmarks across the world have posted repeated records this year, potential headwinds to global growth remain. Treasury yields slid on  Tuesday after Federal Reserve governor Lael Brainard said soft inflation could cause her to reassess the path forward for monetary policy should it linger.

Fed policy makers lifted rates in March and have penciled in two more 2017 rate increases, and investors expect the first of those to come in June.