By Kenan Machado
Buying built into the afternoon in Asian stocks after a muted opening as what was a strong July for most markets in the region comes to a close.
A robust start to earnings season and higher commodity prices have been helping equities of late, but there is some modest profit-taking as the possibility of tax and infrastructure overhauls in the U.S. fades, said Hao Hong, head of research at Bocom International in Hong Kong.
Over the past 30 years, August has been U.S. stocks’ worst month, as summer vacations in the Northern Hemisphere sap market liquidity. Some may be selling in anticipation of a pullback.
Monday’s stock trading was also colored by last week’s declines in the dollar, which finished Friday near its lowest levels in a year.
While the WSJ Dollar Index /zigman2/quotes/210673925/realtime XX:BUXX +0.05% rose slightly in Asia, the dollar hit a fresh six-week low against the yen /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0942% , falling below ¥110.50. “Although GDP data on Friday displayed growth in the U.S. economy, the figures weren’t as strong as had been envisaged, weakening the U.S. dollar further,” said National Australia Bank currency strategist Rodrigo Catril.
The Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.45% closed down 0.2%, putting the drop for July at 0.5%. The Japan benchmark hasn’t had a down month since March.
But a number of exporter and electronics stocks, which typically fall when the yen strengthens, rose Monday. Strong earnings growth from Hitachi /zigman2/quotes/203839937/delayed JP:6501 -3.97% and Kyocera /zigman2/quotes/204880749/delayed JP:6971 -0.49% helped, and Kyocera helped, and their stocks jumped 5.3% and 3.2%, respectively, to hit their best levels in two years.
Meanwhile, investors again looked to be largely ignoring a missile firing by North Korea. Experts said the launch late Friday showed that the continental U.S. is now in range of Pyongyang’s arsenal.
Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.92% , which posted its biggest decline of the year Friday, before the launch, finished flat on Monday as Hyundai Motor /zigman2/quotes/206684590/delayed KR:005380 +0.82% slid 3% and cosmetics giant AmorePacific /zigman2/quotes/207801681/delayed KR:090430 +1.58% skidded 2.6%.
Hong Kong and Australia were among the day’s top performers. The Hang Seng /zigman2/quotes/210598030/delayed HK:HSI -2.19% closed up 1.1%, ending the month up 5.9%. The index hasn’t logged a monthly decline this year, its longest winning streak since 2007.
Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.89% rose 0.3% on commodity-stock strength as it tries to after starting Monday down 0.3% for July, finishing the month down 0.02%, its third consecutive down month. BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP -1.12% rose 2% and Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO -1.44% added 2.2%, in line with the jump in Chinese iron-ore futures.
Oil Search /zigman2/quotes/204702973/delayed AU:OSH +3.73% gained 0.7% and Woodside Petroleum /zigman2/quotes/203437212/delayed AU:WPL +1.48% added about 1.1% as international and U.S. crude prices rose 0.5% and 0.4%, respectively, adding to last week’s gains, the biggest of 2017.