Asian stocks steadied early on Monday, taking cues from Wall Street shares hovering around record highs, while the pound nursed losses after a poll showed a shrinking lead for Prime Minister Theresa May’s party in Britain’s upcoming elections. MSCI’s broadest index of Asia-Pacific shares outside Japan stood little changed. Japan’s Nikkei edged up 0.1 percent and Australian shares were flat. On Friday, the S&P 500 and Nasdaq scraped to record closing highs on strength in consumer shares. The dollar index against a basket of major currencies was steady at 97.435 after rising on Friday thanks to upbeat U.S. gross domestic product data.
The greenback was little changed at 111.270 yen, with the safe-haven Japanese currency showing little reaction after North Korea fired what appeared to be a short-range ballistic missile early on Monday. “While the North Korean situation remains tense, the market has gotten used to missile launches, with broader volatility also declining,” said Shusuke Yamada, senior strategist at Bank of America Merrill Lynch in Tokyo.
“The U.S. markets will also be shut today, and that is curbing incentive and restricting overall movements as well.” The U.S. markets will be closed on Monday for Memorial Day. The pound was a shade higher at $1.2811 after dropping more than 1 percent on Friday to as low as $1.2775.
Sterling suffered its steepest fall since January on Friday after an opinion poll showed the governing Conservatives’ lead over the Labour opposition down to just 5 percentage points with less than two weeks before a general election. The euro was virtually flat at $1.1176 after slipping against the broadly firmer dollar on Friday. The common currency had soared to a 5-1/2-month high of $1.1268 last week on factors including relief at the French presidential election outcome, but has failed to make further headway.
Crude oil prices were slightly higher, continuing their modest recovery after suffering a big drop last week on disappointment that an OPEC-led decision to extend production curbs did not go as far as many investors had hoped. U.S. crude was up 0.25 percent at $49.93 a barrel, having slumped to as low as $48.18 on Friday. Spot gold hovered close to a near four-week high of $1,269.50 an ounce hit on Friday, led higher by investors who feared political risks.