By Kenan Machado
Tech stocks and stabilizing commodity prices helped stocks in Asia start the week on an up note amid a lack of major data releases or other market catalysts.
After notching a fifth straight weekly decline, oil prices rose steadily in Monday-morning trading, putting session gains at about 1%, with August Brent futures rising above $46 a barrel.
Stabilization in commodities is helping beaten-down Australian stocks, noted Michael McCarthy chief market strategist at CMC. The S&P/ASX 200 fell 1% last week amid weakness in commodity stocks, with Australian equities notably lagging others in the region.
Tech was also a tailwind Monday for Asian stocks. A pullback in U.S. giants this month has generated some concern. But the sector fared well to start this week.
Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.33% rose 0.4%, led by a 1.4% gain for Samsung /zigman2/quotes/209800866/delayed KR:005930 +1.93% as that company, which makes up one-quarter of the index, hit record highs.
Taiwan’s tech-heavy Taiex index rose 1.3% to lead Asia and hit 27-year highs, and Hong Kong’s Hang Seng /zigman2/quotes/210598030/delayed HK:HSI -0.69% added 0.8%. There, index heavyweight Tencent /zigman2/quotes/204605823/delayed HK:700 -0.98% added 1.4%.
Lagging, though, were a number of large financial stocks in the region. Amid fresh declines in Treasury yields, major Japanese life insurers including Dai-ichi /zigman2/quotes/208507587/delayed JP:8750 +0.08% fell 0.9% and Resona /zigman2/quotes/203178794/delayed JP:8308 -0.23% dropped 1.1%, while other large financial companies there also fell. Australia’s big banks were also modestly underperforming.
Signs that interest rates would remain low continue to weigh on Japanese financials, said Hisao Matsuura, chief strategist for equities at Nomura Japan. The Bank of Japan’s opinion summary on Monday said the best way to reach 2% inflation is to stick to current monetary policy.
That came as the Bank for International Settlements, a consortium of central banks, said Japanese banks are vulnerable because of their increased U.S.-dollar exposure. With dollar assets topping $3 trillion, those lenders could get hit with a funding gap; last decade’s global financial crisis highlighted such risks.