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GLOBAL MARKETS-Asian stocks edge up on Wall St futures, firmer oil

Published 2019-08-28, 01:58 a/m
© Reuters.  GLOBAL MARKETS-Asian stocks edge up on Wall St futures, firmer oil
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* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Shares stabilise but risks to global economy remain

* Treasury yield curve inversion gets deeper

* Policymakers being forced to support economic growth

By Stanley White

TOKYO, Aug 28 (Reuters) - Asian shares eked out cautious gains on Wednesday, as higher Wall Street futures provided some relief after an overnight U.S. selloff, though deeper worries about the global economy and trade continue to weigh on market sentiment.

Japan's Nikkei .N225 rose 0.21%, Australia's shares climbed 0.41% while Korea's KOSPI .KS11 was up 0.76%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.03%, held back by weaker Chinese markets.

In early European trading, the pan-region Euro Stoxx 50 futures STXEc1 were flat, German DAX futures FDXc1 were up 0.06%, and FTSE futures FFIc1 were down 0.02%.

Oil prices rose in Asia for a second day of gains after an industry report showed U.S. stockpiles fell more than expected.

Gold prices fell in a tentative sign of easing risk aversion, but a deep inversion in the U.S. Treasury yield curve served as a reminder that some investors are still concerned about economic growth.

A trade dispute between the United States and China is now in its second year and is placing increasing strain on the global economy, forcing policymakers to respond with interest rate cuts and stimulus measures to bolster growth.

"Bonds are rallying and there is limited upside for stocks right now," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

"But I don't want to give up on equities just yet. The U.S. Federal Reserve and officials in other countries simply have to do more to stimulate their economies, which will eventually prevent the bottom from falling out."

U.S. stock futures ESc1 were 0.29% higher, which helped ease investors' nerves in Asian trading after the S&P 500 .SPX fell 0.33% on Tuesday.

U.S. crude CLc1 rose 0.95% to $55.45 a barrel, supported by a drawdown in U.S. crude inventories.

Spot gold XAU= fell 0.42% to $1,535.89 per ounce, pulling back from a six-year high. GOL/

South Korea stocks were on course for their biggest daily increase in a week as investors hunted for bargains after shares were sold due to worries about weighting changes in the MSCI index.

China unveiled measures late on Tuesday to help boost consumption, including the possible removal of restrictions on auto purchases, as growth in the world's second-biggest economy falters. shares .CSI300 initially opened higher on Wednesday but then reversed course to trade 0.27% lower, showing there are still some concerns about economic growth.

Shares in Hong Kong .HSI swung between gains and losses as increasingly violent protests against China's "one country, two systems" rule of the former British colony hurt sentiment.

Investors are also focused on Sept. 1, when the first stage of U.S. tariffs on $300 billion worth of Chinese goods is scheduled to go into effect. In response, China has unveiled tariffs on U.S. products set to go into effect the same day.

A bond yield curve inverts when long-term yields trade below short-term yields and is commonly considered a signal of an impending economic recession.

The yield on benchmark 10-year Treasuries US10YT=RR stood at 1.4861%, compared with the two-year yield US2YT=RR of 1.5220%. The yield curve inversion is the deepest since May 2007, when the U.S. subprime financial crisis started to unfold.

The dollar was little changed at 105.86 yen JPY=EBS after falling 0.3% on Tuesday.

https://tmsnrt.rs/2MM2qlO Yield Spreads

https://tmsnrt.rs/2QgpV9Q

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Sam Holmes and Jacqueline Wong)

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