Global stocks stood firm on Tuesday,September 5, after great selloffs.Asian shares eked out small gains as expectations that Beijing will maintain support for its economy ahead of a key congress supported Chinese stocks and metals prices, but worries about North Korea kept many investors on edge.
European shares were expected rise slightly after a slide on Monday. Spread betters see Germany’s DAX .GDAXI and France’s CAC .FCHI gaining 0.3 percent and Britain’s FTSE .FTSE 0.1 percent.
But Wall Street looked set to open slightly softer after a long holiday weekend during which Pyongyang triggered its most powerful nuclear test yet. S&P500 mini futures ESc1, which had slid on Monday, last stood at 2,469, 0.2 percent below Friday’s close.
MSCI’s index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.2 percent thanks to gains in Chinese shares, though many markets were in the red.
Japan’s Nikkei .N225 fell 0.6 percent on fears that more provocation from North Korea is possible. Media said the North appeared to be preparing for further ballistic missile tests.
The White House said on Monday that “all options to address the North Korean threat are on the table” while U.S. Ambassador to the United Nations Nikki Haley urged the 15-member U.N. Security Council to impose the “strongest possible” sanctions to deter Pyongyang.
“It’s not clear whether diplomacy can solve this problem given it has failed for the last 25 years,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“But the U.S. doesn’t seem to be ready for a military action soon, either. So we are likely to see continued stalemate, which will keep a tab on share prices.”
Fears about North Korea kept safe-haven assets in demand, with gold XAU= rising 0.1 percent to $1,336 per ounce, after having hit a 11-month high of $1,339.8 on Monday.
In the currency market, the yen, which usually gains on risk aversion due to Japan’s net creditor nation status, gained 0.4 percent to 109.32 yen to the dollar JPY=, near Monday’s high of 109.22 yen.
The euro EUR= slightly extended its gains to trade at $1.1905.
The Chinese yuan hit a near 16-month high of 6.515 per dollar CNY=CFXS. It has gained 2.0 percent in less than two weeks, a sizable move for the pair, in response to dollar weakness and a series of stronger midpoints set by the central bank.
The Shanghai composite index .SSEC of mainland Chinese shares hit its highest levels since January 2016, due to solid economic and earnings growth in China in recent months and expectations that Beijing will not tolerate any disruptions ahead of a key Communist Party Congress in mid-October.
Such expectations also helped to lift copper CMCU3 to a near three-year of $6,944.5 per tonne. It last stood at $6,933, up 0.2 percent on the day.
