Asian Shares, Dollar Struggle on Ukraine Anxiety
April 25, 2014 2:19 PM EST
Asian stocks struggled on Friday, as fears of an escalating Ukraine crisis eclipsed upbeat U.S. economic data and robust U.S. tech shares.
Asian shares rise as Fed Minutes Soothe Sentiment
U.S. Secretary of State John Kerry said on Thursday that time was running out for Moscow to change its course in Ukraine.
MSCI's broadest index of Asia-Pacific shares outside Japan erased early modest gains and fell 0.3 percent.
Japan's Nikkei stock average took an opposite track and added 0.5 percent in choppy trade, after opening solidly lower amid disappointment over a failed attempt to reach a U.S.-Japan trade pact.
The two countries made progress in trade talks at a bilateral summit in Tokyo but did not reach the Trans-Pacific Partnership (TPP) trade deal that they were hoping to seal, Economy Minister Akira Amari said on Friday.
"The initial reaction to the TPP was negative, but then people started looking into companies' results," said Kyoya Okazawa, head of global equities at BNP Paribas in Tokyo, explaining the Nikkei's about-face.
"I think this is shortcovering, and now people will focus on individual stocks throughout earnings season rather than the macro picture," Okazawa said.
Core consumer prices in Tokyo, a leading indicator of nationwide inflation, rose 2.7 percent in April from a year earlier, a hair shy of forecasts. But it was still the fastest gain since 1992 as a national sales tax hike drove up prices.
On Wall Street overnight, stocks managed to shrug off the rising Ukraine tensions after tech bellwethers Facebook and Apple posted upbeat results on Wednesday and U.S. economic data suggested that growth picked up pace in the second quarter.
U.S. durable goods orders rose more than expected in March and a measure of business capital spending plans surged.
While brighter U.S. stocks and upbeat data supported the greenback, it still fell against a basket of major currencies, with the dollar index edging down to 79.760.
But the U.S. unit took back some lost ground against the yen, adding about 0.1 percent to 102.42 yen, while the euro also rose 0.1 percent against its Japanese counterpart to 141.65 yen.
Against the dollar, the euro was steady on the day at $1.3832, despite comments from European Central Bank President Mario Draghi repeating recent concerns about euro strength and the ECB's willingness to launch a "broad-based asset purchase programme" if low inflation become entrenched.
The European unit was supported by an improvement in a German business sentiment index, which indicated that Europe's largest economy managed to overcome the rising Ukraine tensions.
China's yuan opened at 6.2510 per dollar on Friday, marking a new 16-month low.
In the commodities front, spot gold XAU= was down about 0.1 percent at $1,291.50 an ounce after touching its lowest levels since February on Thursday, though fears about the Ukraine crisis provided some support.
Brent crude edged up to $110.41 a barrel, adding to its overnight surge of $1.22 a barrel on the Ukraine unrest.