Hong Kong Shares on Track to Snap Four Weeks of Gains

As the dust settles on the Fed and Bank of Japan keeping rates unchanged, attention is turning to the U.K. referendum next week on whether to leave the European Union.

Concerns of such a likelihood seem to have eased, with the yen pulling back slightly from its recent strength. That means risk appetite could be renewed a bit today in Hong Kong. Hang Seng Index futures were up 1.3% before the market open.

Still, the Hang Seng Index is on track to post a weekly loss, snapping four straight weeks of gains. Stocks were battered this week by worries about central bank meetings and the chance of a so-called " Brexit."

 

 

Japanese stocks are expected to be under pressure from renewed yen strength. The currency strengthened against the dollar, after the Bank of Japan (BOJ) kept monetary policy steady on Thursday, in line with expectations.

Oil prices slumped overnight on the back of global economic uncertainties surrounding the crucial June 23 referendum in the UK, where Britons will vote to decide to either leave or remain within the European Union. Global benchmark Brent fell 3.6 percent to $ 47.19 a barrel, while US crude dropped 3.8 percent to $ 46.21.

Campaigning for the referendum was halted Thursday, after a British lawmaker, Jo Cox, was shot to death while meeting with constituents. Police said they arrested a 52-year-old man in the attack on Cox, but did not know of a motive for the killing.

The British pound traded at $ 1.4211 as of 6:33 a.m. HK / SIN on Friday, up from levels as low as $ 1.40 on Thursday on the back of the news.

The dollar touched levels near 95.300 overnight against a basket of currencies, before retreating. Friday early morning, the dollar index was a 94.608.

On the data front, Japan' s May trade data are due Friday morning.

 

Symbol	Name	Price		Change	%Change
DJIA	Dow Industrials	17733.10		92.93	0.53%
S& P 500	S& P 500 Index	2077.99		6.49	0.31%
NASDAQ	NASDAQ	4844.92		9.98	0.21%

Stocks snap 5-day losing streak Dow closes higher in triple-digit reversal

U.S. stocks closed higher Thursday, ending a five-day losing streak with telecoms leading sector advancers.

The Dow Jones industrial average closed about 93 points higher with 3M contributing the most to gains. Earlier, the Dow fell nearly 169 points.

The S & P 500 closed about a third of a percent higher after earlier falling 1 percent. Energy was the only declining sector as U.S. crude oil futures settled down $ 1.80, or 3.75 percent, at $ 46.21 a barrel.

The major indexes came off session lows as selling in the British pound eased against the U.S. dollar. To trade higher around $ 1.422 as of the U.S. stock market close.
The move in sterling coincided with a tweet from UK Prime Minister David Cameron stating that all campaigning around the EU referendum has been suspended, following news that Labour Member of Parliament Jo Cox died from a shooting earlier in the day. The cause of the shooting was unclear, but there was speculation the act could encourage more voters to choose to remain in the EU.

" Civility took over and the debate over Brexit stopped for a period of time," said Art Hogan, chief market strategist at Wunderlich Securities.

Gold also came well off session highs, after earlier extending its rise above $ 1,300 an ounce to hit its highest since August 2014.

Traders cited some technical support around 2,050 on the S & P as helping the intraday turnaround. The Dow and S & P posted their first five-day losing streak since February on Wednesday.

" The turn (in stocks) started when Europe started to close," said Peter Coleman, head trader at Convergex. He noted stocks were somewhat oversold and attributed much of the midday recovery to the close in European stocks and some short-covering.

European stocks ended well off their lows, with the STOXX Europe 600 about 0.72 lower.

Overnight, the Bank of Japan did not offer additional monetary stimulus. BOJ Governor Haruhiko Kuroda said the strength in the yen " could have undesirable effects on Japan' s economy and future inflation," according to a Reuters report.
" It really calls into question whether the Bank of Japan has run out of bullets and trigger the yen to go higher (against the dollar)," said Nick Raich, CEO of The Earnings Scout.

As stocks sold off into the close Wednesday after Fed Chair Janet Yellen' s press conference, traders cited concerns about Fed credibility.

The latest Brexit poll showed that among those likely to vote, British support for leaving the European Union in a June 23 referendum has risen to 53 percent, according to a survey by Ipsos Mori reported by Reuters.

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