Asian stock markets were mixed on Tuesday following a flat close on Wall Street, as investors searched for the next catalyst following France’s presidential election, while oil inched higher on expectations OPEC supply cuts will be extended. The South Korean stock market is closed for Tuesday’s presidential election, in which liberal Moon Jae-in is widely expected to win the presidency, following months of leadership vacuum after former President Park Geun-hye was removed on charges of bribery and abuse of power.
The polls opened at 6 a.m. (2100 GMT on Monday) and will close at 8 p.m. (1100 GMT). The winner is expected to be sworn in on Wednesday after the Election Commission releases the official result. Allies and neighbours are closely watching the election amid escalating tensions over North Korea’s accelerating development of weapons since it conducted its fourth nuclear test in January last year. It conducted the fifth test in September and is believed ready for another.
North Korea would be keen to see a Moon victory. It’s official Rodong Sinmun newspaper said in a commentary on Monday the time had come to put confrontation behind the Koreas by ending conservative rule in the South. “South Korean markets had not registered significant risk-off sentiment similar to other economies pre-elections, and this is no surprise,” Jingyi Pan, market strategist at IG in Singapore, wrote in a note.
“The largely similar stance on policies by the Presidential candidates provides little chance of surprise as compared to last week’s French election. Meanwhile, the filling of the political vacuum could go a long way to benefitting the economy.”The Korean won was slightly lower on Tuesday, with the dollar buying 1,133.34 won. South Korean stocks closed at a record high on Monday.
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MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent on Tuesday. Japan’s Nikkei was also down 0.1 percent. China’s CSI 300 index retreated 0.8 percent, while Hong Kong’s Hang Seng fell 0.1 percent. Taiwan stocks bucked the trend, surpassing the 10,000 point mark to hit a two-year high. They were last up about 0.2 percent. Most south-east Asian stocks were also higher.
The MSCI World index, which touched a record high overnight, edged lower. The dollar was also little changed at 113.24 yen, retaining most of Monday’s 0.4 percent gain. The dollar index was also steady at 99.11. The euro crawled up slightly to $1.0929 after tumbling 0.7 percent on Monday. “A Macron win is largely priced into the euro,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto. “Heavy trading in the spot market so far today suggests a modest unwind of the April and May rally is coming, at least.”
French stocks slumped 0.9 percent overnight, as investors took profits following strong gains in the run-up to Sunday’s vote that saw the market favourite, centrist Emmanuel Macron, elected president. Germany’s DAX closed 0.2 percent lower, while Britain’s FTSE was marginally higher. On Wall Street, all three major indexes closed flat, holding near recent all-time highs. The CBOE Volatility Index closed at 9.77, its lowest since December 1993.
In commodities, oil edged up from a near-six-month low hit last week, lifted by statements from major oil producing countries that supply cuts could be extended into 2018. U.S. crude advanced 0.1 percent to $46.47 a barrel. Global benchmark Brent also rose 0.1 percent to $49.36. Copper pulled higher from Monday’s four-month low, reached after data showed a sharp drop on imports into China, the world’s biggest consumer.
London copper added 0.2 percent to $5,495.50 a tonne on Tuesday, after falling to as low as $5,462.50 on Monday. Gold recovered from a seven-week trough touched on Monday. Spot gold rose 0.2 percent to $1,227.93 an ounce. (Reporting by Nichola Saminather; Additional reporting by Noel Randewich; Editing by Eric Meijer and Sam Holmes)
(Reporting by Nichola Saminather; Additional reporting by Noel Randewich; Editing by Eric Meijer and Sam Holmes)