Monday 02.20 GMT

What you need to know

  • Australian dollar and stocks lower after tense Apec meeting
  • Pound steady after EU moots longer Brexit transition period
  • Oil prices continue gradual recovery following last week’s tumble

Overview

The latest signs of dysfunction in the US-China relationship, laid bare at the Asia-Pacific Economic Cooperation meeting over the weekend, hit markets in the region unevenly, with the Australian dollar and Sydney-listed stocks lower while other benchmarks were largely higher. Oil prices rose further after a positive end to the previous week while the UK pound was little moved after the latest round of Brexit-related drama on Sunday.

Hot topic

Stock benchmarks in Asia diverged in the wake of tension between Mike Pence, the US vice-president, and Chinese President Xi Jinping at the Apec summit — which failed to issue a joint communiqué for the first time in its 29-year history — damped hopes that a detente between Washington and Beijing could be in store at the G20 world leaders summit in Argentina later this month.

In Sydney the S&P/ASX 200 index was off 0.7 per cent as financials shed 0.8 per cent and the key mining segment dropped 0.1 per cent. Fairfax Media, however, rose 2.9 per cent after its shareholders overwhelmingly backed a A$2.2bn ($1.6bn) buyout bid from Nine Entertainment.

Hong Kong’s Hang Seng index was up 0.4 per cent as technology stocks climbed 1.6 per cent and financials added 0.3 per cent. The CSI 300 index of Shanghai- and Shenzhen-listed stocks was up 0.5 per cent.

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In Tokyo the Topix eked out a gain of 0.1 per cent as gains of 1.3 per cent for tech stocks and 0.4 per cent for industrials offset a drop of 1.7 per cent for financials.

In New York on Friday the S&P 500 shook off initial losses to finish up 0.2 per cent for the day as the energy sector rallied, though the index lost 1.6 per cent over the week. The Dow Jones Industrial Average rose 0.5 per cent but the tech-heavy Nasdaq slid 0.2 per cent.

Forex and fixed income

The Australian dollar, which often serves as a proxy for China’s economic outlook, slipped 0.2 per cent to $0.732 against the US dollar after the weekend’s trade tension. The dollar index — which tracks the US currency against a basket of peers — held steady at 96.437, while the Japanese yen was up 0.2 per cent at ¥112.63 per dollar.

The UK pound was hovering at $1.2835 amid continued Brexit uncertainty after the EU’s chief Brexit negotiator proposed extending Britain’s transition out of the bloc until as late as December 2022.

Sovereign bond markets were mostly stable, with the 10-year US Treasury yield holding steady at 3.061 per cent.

Commodities

Oil prices continued to climb after finishing higher on Friday for a third straight day. Brent crude, the international benchmark, climbed 1.1 per cent to $67.49 a barrel while US marker West Texas Intermediate rose 1.4 per cent to $57.22.

Gold was flat at $1,221.53 per ounce.

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