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Asia stocks follow positive lead from US peers

Tuesday 02.00 GMT


Stocks across Asia were higher, taking their lead from US and European bourses that shrugged off the result of a No vote in Sunday’s Italian referendum on constitutional reform.

Hot topic

China’s renminbi has become a talking point after a handful of web sites, including Google, generated apparently erroneous quotes for the currency around Rmb7.48 per US dollar — a rate that would represent a one-off devaluation of more than 8 per cent. That generated speculation about where the People’s Bank of China would fix the daily midpoint for the onshore renminbi’s trading band.

The PBoC actually set the midpoint stronger, and the renminbi was trading one-quarter of 1 per cent stronger at Rmb6.8647, its largest one-day gain in four months.

What to watch

The Reserve Bank of Australia delivers its decision on monetary policy later on Tuesday but is expected to keep interest rates steady at a record low of 1.5 per cent. Data published this morning showing that net exports will wipe 0.2 percentage points off economic growth in the September quarter bode ill for official GDP numbers due Wednesday and raise the risk of the Australian economy experiencing its first quarterly contraction since the first three months of 2011.

The Australian dollar was down 0.3 per cent at US$0.7451 in response to the weak data, making it the worst performer among Asian currencies.


Japan’s Topix was up 0.6 per cent while Australia’s S&P/ASX 200 rose 0.8 per cent, buoyed by gains for heavyweight commodity and banking stocks.

Hong Kong’s Hang Seng added 0.6 per cent, while China’s Shanghai Composite gained 0.2 per cent.


The euro was flat in Asia at $1.0763. The single currency endured a volatile session on Monday, hitting a 20-month low as Italian Prime Minister Matteo Renzi conceded defeat over the referendum and handed in his resignation, before closing 0.9 per cent stronger. That weighed on the US dollar index, which was flat on Tuesday at 100.10 after falling by two-thirds of 1 per cent the previous session.

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