Asia markets steady on firmer Wall Street, pound nurses losses

A pedestrian walking past a quotation board flashing the key Nikkei index of the Tokyo Stock Exchange in Tokyo, on May 18, 2017.
A pedestrian walking past a quotation board flashing the key Nikkei index of the Tokyo Stock Exchange in Tokyo, on May 18, 2017. PHOTO: AFP

TOKYO (REUTERS) - Asian stocks steadied early on Monday (May 29), taking cues from Wall Street shares hovering around record highs, while the pound nursed losses after a poll showed a shrinking lead for Prime Minister Theresa May's party in Britain's upcoming elections.

MSCI's broadest index of Asia-Pacific shares outside Japan stood little changed.

Japan's Nikkei edged up 0.1 per cent and Australian shares were flat.

On Friday, the S&P 500 and Nasdaq scraped to record closing highs on strength in consumer shares.

The US dollar index against a basket of major currencies was steady at 97.435 after rising on Friday thanks to upbeat US gross domestic product data.

The greenback was little changed at 111.270 yen, with the safe-haven Japanese currency showing little reaction after North Korea fired what appeared to be a short-range ballistic missile early on Monday.

"While the North Korean situation remains tense, the market has gotten used to missile launches, with broader volatility also declining," said Shusuke Yamada, senior strategist at Bank of America Merrill Lynch in Tokyo. "The US markets will also be shut today, and that is curbing incentive and restricting overall movements as well."

The US markets will be closed on Monday for Memorial Day.

The pound was a shade higher at US$1.2811 after dropping more than 1 per cent on Friday to as low as US$1.2775.

Sterling suffered its steepest fall since January on Friday after an opinion poll showed the governing Conservatives' lead over the Labour opposition down to just 5 percentage points with less than two weeks before a general election.

The euro was virtually flat at US$1.1176 after slipping against the broadly firmer dollar on Friday. The common currency had soared to a 5-1/2-month high of US$1.1268 last week on factors including relief at the French presidential election outcome, but has failed to make further headway.

Crude oil prices were slightly higher, continuing their modest recovery after suffering a big drop last week on disappointment that an Opec-led decision to extend production curbs did not go as far as many investors had hoped.

US crude was up 0.25 per cent at US$49.93 a barrel, having slumped to as low as US$48.18 on Friday.

Spot gold hovered close to a near four-week high of US$1,269.50 an ounce hit on Friday, led higher by investors who feared political risks.