Asia Markets wrap

Hong Kong: Panicky investors piled into gold, taking the yellow metal to all time highs amid growing friction between the world’s two largest economies which has soured risk appetite.

China’s Foreign Ministry spokesman said a US entry into the premises of the Chinese Consulate in Houston was an infringement and expressed strong dissatisfaction and firm opposition to it.

“China will make a proper and necessary response in this regard,” he said.

Investors also pared positions as the corporate earnings season rolls on. Facebook, Amazon, Apple and Google are all due to report quarterly earnings this week. The US Federal Reserve’s rate-setting committee also meets on Tuesday, with an announcement due on Wednesday.

Gold prices rose 2.1% to $1,941 an ounce and US Treasuries rallied with the 10-year yield dropping 2 basis points to 0.58%.

“Ever decreasing interest rates and record-setting gold prices, however, reveal considerable nervousness about the outlook. The flight into gold, US treasuries, CHF, and JPY is cautioning against complacency regarding a market correction this summer,” DBS chief economist Taimur Baig said in a note.

Japan’s Nikkei 225 index dipped 0.16% and Hong Kong’s HSI index dropped 0.41%.

But Australia’s S&P ASX 200 benchmark added 0.34%, helped by a rally in gold mining stocks after the price of the precious metal reached an all-time high of US$1,943.93 per ounce.

And China’s mainland CSI 300 index climbed 0.51% after economic data showed that recovery in China’s industrial firms’ profits quickened in June.

Asian credit markets traded flat with the Asia IG index at 74/75 basis points and sovereign credit spreads ranging between marginally tighter to 1-2 basis points wider.

But primary markets were busy as issuers tapped yield-hungry investors’ appetite for credit. DaFa PropertiesChong Hing BankKorea South-East PowerChina Everbright BankCSC Financial are in the market with new bond offerings.

Also on Asia Times Financial

China to shut out the ‘zombies’ and aid promising firms 

China bids to eliminate illegal debt hidden in govt system

Outlook for China’s bond market in H2

China’s software industry bounces back – but for how long?

Huawei has ‘no plans to cut jobs or business in India’

Global economy needs a coronavirus vaccine – fast

Foreign Exchange: Hedging dollar decline, buying gold …and the yuan?

Asia Stocks

# Japan’s Nikkei 225 dipped 0.16%

# Australia’s S&P ASX 200 added 0.34% 

# Hong Kong’s Hang Seng index fell 0.41%

# China’s CSI300 advanced 0.51%

# The MSCI Asia Pacific index climbed 0.59%.

Stock of the day 

Shandong Gold Mining Co rose as much as 12.9% after the price of gold struck a record high of US$1,943.93 per ounce. Earlier this month the company said its profit would grow 80%-110% in the first half on the back of the gold rally.

This report appeared initially on Asia Times Financial.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.