WELLINGTON ( Bloomberg News) - Asian index futures signaled a mixed day for stocks, with mainland Chinese markets returning to the fray after missing the global equity rally due to a week-long holiday.
While futures on South Korea stocks climbed with Australian and New Zealand shares, a two-day gain in the yen dimmed prospects for Japanese equities and Hong Kong futures also retreated. Chinese markets, which were at the epicenter of August's global turmoil, will trade for the first time since last Thursday, with stocks around the world posting their longest rally since April in Shanghai's absence and emerging- market assets soaring. Oil resumed gains after an increase in U.S. supplies sent it below US$48 a barrel.
"The Chinese market is likely to rise," Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, said by phone. "We're still in a more risk-on state rather than a risk-off state so I expect equities to remain stable. Until we can be sure about the U.S. rate hike, I expect that situation to continue." Since capping their most volatile quarter since 2011, global stocks have staged a recovery as bets the Federal Reserve will delay raising interest rates until next year spurs demand for riskier assets and the dollar's decline bolstering commodity prices. Shanghai shares were still hovering near their 2015 low before the holiday break, with Hong Kong-traded Chinese equities jumping to an almost seven-week high in the interim. Mounting signs of a slowdown in China and its potential to spread throughout the world economy fueled last quarter's selloff, with regulators there struggling to quell gyrations in the local market.
Standard & Poor's 500 Index futures were little changed at 1,987.75 by 8:44 a.m. in Tokyo, after a 0.8 per cent increase in the U.S. benchmark Wednesday, its sixth advance in seven days. A slump Tuesday in biotechnology shares threatened to derail the S&P 500's rally, which helped fuel the MSCI All-Country World Index's 6.9 percent climb since Sept. 30.
New Zealand's S&P/NZX 50 Index added 0.1 per cent in Wellington, while the S&P/ASX 200 Index in neighboring Australia jumped 1 per cent. Contracts on the Kospi index in Seoul foreshadowed gains of 0.8 per cent, while those on Hong Kong's Hang Seng and Hang Seng China Enterprises indexes dropped at least 0.3 percent.
Futures on Japan's Nikkei 225 Stock Average were bid down 0.2 per cent in the Osaka pre-market, to 18,350, with the yen strengthening 0.4 per cent over the past two days. The currency was little changed early Thursday at 119.96 per US dollar. Yen- denominated futures on the Nikkei 225 fell 0.1 per cent to 18,325 in Chicago, after rising 1 per cent last session.
"The momentum tells us that the August-to-September downtrend is still in control of global markets," Evan Lucas, a markets strategist at IG Ltd. in Melbourne, said in an e-mail to clients. "Stocks with high discounts that are seeing an easing in the top-down pessimism thematic are looking attractive as a buying opportunity. But be on the lookout for the second leg of the downturn." The Deutsche X-trackers Harvest CSI 300 China A-Shares exchange-traded fund, the largest U.S. ETF tracking Chinese stocks, jumped 2.8 per cent Wednesday and has climbed 6.7 per cent this month.
Commodities West Texas Intermediate crude rose for the fourth time in five days, gaining 1 percent to US$48.28 a barrel after retreating 1.5 per cent on Wednesday.
Investors are weighing OPEC's forecast for an increase in global demand for oil against evidence U.S. stockpiles are rising along with production there. The drop in prices will ensure demand climbs more than has been projected, Abdalla Salem El-Badri, Secretary-General of the Organisation of Petroleum Exporting Countries, said in a statement to the International Monetary Fund. Meanwhile, U.S. data showed supplies expanded by more than 3.07 million barrels through Oct. 2 as output rose for the second time in three weeks.
Copper futures were little changed at US$2.3660 a pound on the Comex, having rallied 1.1 percent while China was closed. Gold for immediate delivery was steady at US$1,145.95 an ounce after see-sawing throughout the week amid speculation over the outlook for U.S. rates.
Japan updates on machinery orders Thursday and reports on its current account, while Thailand posts consumer confidence.