Asia stocks mixed in morning trade as oil prices climb

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Equities put in a mixed performance in early Asia trading on Tuesday ahead of comments by Federal Reserve chair Janet Yellen and as oil prices climbed back from a drop spurred by a report indicating output from the US was set to ramp up.

Stock markets in the Asia Pacific region diverged during the morning session. In Australia the S&P/ASX 200 index was up 0.4 per cent, led higher by gains of more than 1 per cent in both the real estate and information technology segments.

Tokyo’s broad Topix index was down 0.1 per cent as a 0.6 per cent rise from materials stocks was more than offset by a drop of 1 per cent in the consumer staples segment. Shares in Toshiba fell as much as 4.6 per cent following a Nikkei report claiming that the troubled nuclear and electronics conglomerate would issue a “business risk warning” later in the day. The Nikkei 225 index was down 0.2 per cent.

Shares in Singapore’s Oversea-Chinese Banking Corporation were down 2.8 per cent in morning trade after the bank reported fourth-quarter net profit had fallen by 18 per cent and non-performing loans had risen in the 2016 financial year. The FTSE Straits Times index was down 1 per cent by comparison.

In Hong Kong the Hang Seng index was down 0.2 per cent, with drops of 1.7 per cent in utilities stocks and 1.3 per cent in consumer staples stocks offsetting a comparable rise in the consumer discretionary segment. In China the Shanghai Composite index was off 0.2 per cent.

The Australian dollar led gains on the greenback, rising 0.4 per cent against its US counterpart to $0.7662.

Currency movements were otherwise muted in Asian morning trade, with the dollar index tracking the US currency against a basket of peers virtually flat. The yen was also flat against the dollar at ¥113.73 after weakening 0.5 per cent on Monday.

China’s renminbi was 0.1 per cent softer at Rmb6.8862 after the central bank set its dollar trading band weaker by the same amount.

Moves in fixed income were mixed as investors awaited hints on the outlook for monetary policy from comments by Fed chair Janet Yellen, who is due to give semiannual testimony to the Senate Banking Committee on Tuesday in the US.

Yield, which moves inversely to price, on 10-year US Treasuries was up 1 basis point at 2.443 per cent. That on 10-year Japanese government bonds was flat at 0.085 per cent.

The biggest move came from Australia’s 10-year sovereign notes, which saw yield up 4 bp at 2.74 per cent. That on New Zealand’s 10-year government bonds was also up 4 bp at 3.228 per cent.

Oil was climbing on Tuesday morning trade in Asia after tumbling on Monday as the Energy Information Administration estimated that US crude production would climb by 80,000 barrels a day in March, with more US drillers bring rigs back online in response to stabilising prices.

The price of Brent crude, the international benchmark, was up 0.4 per cent at $55.80 a barrel after dropping 2 per cent on Monday. West Texas Intermediate, the US marker, had risen 0.3 per cent to $53.09 a barrel after a fall of 1.7 per cent the previous day.

Gold was flat at $1,225.50 per ounce.

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