Asian stocks eke out gains, dollar nears a nine-month high

Tokyo (Reuters): Asian stocks eked out gains but lacked clear direction on Monday after Wall Street’s sluggish performance late last week, while the dollar hit a near nine-month high as comments from a Federal Reserve official boosted bets of a rate hike by year-end.

Spreadbetters expected Britain’s FTSE, Germany’s DAX and France’s CAC to open slightly higher.

MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.2%.

South Korea’s Kospi gained 0.4%. Australian stocks lost 0.5%, hurt by a decline in energy shares.

Japan’s Nikkei moved in a tight range and was last up 0.2%.

“There are few investors who want to chase the market higher until they see more news from overseas, especially those regarding a U.S. rate hike,” said Yutaka Miura, senior technical analyst at Mizuho Securities in Tokyo.

Shanghai outperformed, rising over 1% as energy and raw material stocks jumped on indications that government measures to slash production capacity had shown signs of some success.

The optimism spread to Hong Kong, but gains in the Hang Sang were limited by concerns over continued yuan weakness, as well as a possible U.S. rate hike.

People walk past an electronic board displaying various Asian countries’ stock price index and world major index outside a brokerage in Tokyo, Japan, 21 August 2015

On Friday in Wall Street, the S&P 500 and the Dow were little changed and the Nasdaq advanced as a record day for Microsoft and earnings from McDonald’s MCD.N) helped offset a fall in energy and healthcare shares.

“It will be something of a hiatus week, given that next week brings the BoJ, Fed and BoE meetings...however there is a heavily back-loaded run of data in the U.S., Japan and euro zone, and there will be a deluge of U.S. and indeed European and Asian corporate earnings,” wrote Marc Ostwald, strategist at ADM Investor Services International.

Global markets are bracing for a slew of data this week including consumer price data from Japan and some euro zone countries, third quarter U.S. GDP and a number of purchasing managers’ index (PMI) data from developed economies.

In currencies, the dollar index was up 0.1% at 98.780 after touching 98.846, its highest since Feb. 3.

The U.S. currency received a boost last week as the euro slid after the European Central Bank doused talk it was contemplating tapering its monetary easing.

The dollar was also supported by hawkish comments from Fed officials including New York Fed President William Dudley and higher expectations that Hillary Clinton will win the U.S. presidential election, which have increased bets that the Fed will raise rates in December.

The dollar was steady at 103.905 yen. The euro slipped 0.2% to $1.0869 after falling on Friday to $1.0859, its lowest since 10 March.

The Australian dollar was steady at $0.7614.

The offshore Chinese yuan hit a new six-year low against a broadly stronger dollar.

“The PBOC is seen strategically managing the yuan’s weakness,” said Jeong My-young, Samsung Futures research head in Seoul, referring to the People’s Bank of China.

Crude oil prices slipped on concerns supply will outweigh demand, with U.S. crude down 0.6% at $50.55 a barrel.

The contracts had risen about 0.8% on Friday on hopes that Russia and OPEC would reach a price agreement, but worries of oversupply have been a persistent drag on the market.

But oil fell Monday after Iraq said it wanted to be exempt from any deal by OPEC to cut production. Latest data also showed that U.S. oil rig count posted the first double-digit rise since August, weighing on the market. 

Brent crude was down 0.5% at $51.54 a barrel.