Asian stocks were steady in a cautious start on Wednesday after a weak session on Wall Street, while the sterling stumbled as a new poll found British Prime Minister Theresa May’s Conservative Party risks falling short of an overall majority in next month’s national election. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat. Early trade in Australia and Japan was mixed. China’s stock markets are in focus as they reopen after a long weekend with the official survey on manufacturing likely to set the tone for markets there and possibly the rest of the region. The PMI survey, due at 0100 GMT, is expected to show factory activity in China expanded at its slowest pace in eight months in May, according to a Reuters poll.
Analysts at ANZ expect the PMI report to influence base metals trading as well. On Tuesday, U.S. stocks inched lower, with the S&P 500 retreating slightly from a record, as weakness in the energy and financial sectors offset gains in technology shares. In currency markets, the pound fell to $1.2791, near a one-month low of $1.2775 touched on Friday. The pound also slipped to 0.8738 pound per euro, near Friday’s eight-week low of 0.8750.
New constituency-by-constituency modelling by YouGov showed the Conservative Party might lose 20 of the 330 seats it holds while the opposition Labour Party could gain nearly 30 seats, The Times said. The dollar fell to two-week lows against the safe-haven yen as investors turned cautious amid political worries in Europe as well as weaker stock and commodity markets after a long U.S. holiday weekend.
The dollar fell to near two-week low of 110.665 yen and last traded at 110.85 yen. In commodities, oil prices remained soft, as concerns lingered about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices. U.S. crude futures slipped about 0.1 percent to $49.61 a barrel. Global benchmark Brent was flat at $51.84 per barrel. Gold edged lower to $1,262 an ounce.