Asian stocks drifted lower Tuesday as markets weighed a possible rebound in U.S. growth against doubts about Greece’s ability to make debt payments and stay in the euro currency bloc.
KEEPING SCORE: Japan’s Nikkei 225 was down 0.1 per cent at 20,542.17 and China’s Shanghai Composite was down less than 0.1 per cent at 4,826.86. Hong Kong’s Hang Seng shed 0.7 per cent to 27,392.64. Australia’s S&P/ASX 200 dropped 1.4 per cent to 5,654.70 ahead of a central bank interest rate decision. Seoul’s Kospi was down 1.1 per cent to 2,079.35.
GREEK DEADLINE: Greece’s cash-strapped government faced fresh dissent from within the ruling Syriza party after failing to deliver on a promise to reach an agreement with rescue lenders over the weekend. Prime Minister Alexis Tsipras is struggling to reach a deal with bailout creditors to get more bailout loans, without which it cannot afford debt repayments it owes the IMF this month, starting Friday. But Tsipras faces opposition within his own party to any agreement that extends austerity measures that creditors have been demanding.
THE QUOTE: “The risks in global markets are simmering under the surface: Grexit, increases to the Fed funds rate, China’s equity valuations, Japan’s QE program to ‘nowhere,’ ECB’s QE program and Australia’s inability to pull up the slowdown in the economy,” said IG strategist Evan Lucas in a market commentary.
WALL STREET: The biggest gainer in the S&P 500 was chip designer Altera, the target of a $17 billion cash offer by giant chip-maker Intel. Altera jumped $2.83 to $51.68, a 6 per cent gain. Companies have been combining at a rapid clip, helping to boost stocks in the seventh year of the bull market. The S&P 500 rose 4.34 points, or 0.2 per cent, to 2,111.73. The Dow Jones industrial average rose 29.69 points, or 0.2 per cent, to 18,040.37. The Nasdaq composite climbed 12.90 points, or 0.3 per cent, to 5,082.93.
US PULSE: U.S. manufacturing growth accelerated in May for the first time in six months, propelled by more new orders and an increase in hiring, according to the Institute for Supply Management, a trade group. A separate report showed construction spending climbed in April to the highest level in more than six years. Investors are anxious about U.S. growth following a series of weak data, capped by news Friday that the economy shrank in the first three months of the year. Some analysts say the latest data indicate the economy rebounded in the second quarter.
ENERGY: Benchmark U.S. crude was down 4 cents at $60.16 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract fell 10 cents to $60.20 in Nymex floor trading on Monday. Brent crude, a benchmark for international oils, shed 9 cents to $64.79 a barrel in London. It dropped 68 cents to close at $64.88 in the previous trading session.
CURRENCIES: The euro rose to $1.0935 from $1.0928 on Monday. The dollar slipped to 124.64 yen from 124.81 yen.