Asia stocks rally as concerns of rising geopolitical risk ease

Bloomberg

Asian equities advanced as fears of escalating geopolitical risk eased following US President Donald Trump’s tempered response to North Korea’s launch of a ballistic missile across Japan.
More than two stocks rose for each share that declined on the MSCI Asia Pacific Index, which gained less than 0.2 percent to 160.47 as of 4:31 p.m. in Hong Kong, following a 0.2 percent slide. Trump said the US will consider “all options” in response to North Korea’s missile launch. Kim Jong Un said the missile was a “meaningful prelude” to containing the American territory of Guam, adding he will continue to watch the response of the US before deciding on further action.
“Trump’s calibrated response is a reassurance for investors who are becoming accustomed to North Korea’s threat,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “Given the dovish stance of the US Fed and the absence of signals that economies are overheating in Asia, it’s still a positive environment for equities that a weakness should be taken as a buying opportunity.”
Shares rebounded in Japan after the yen pulled back from a four-month high against the dollar. South Korea’s Kospi index continued its recovery from a drop of as much as 1.6 percent Tuesday. Shimao Property Holdings Ltd. was the best performer on the regional benchmark, soaring as much as 17 percent in Hong Kong, its biggest gain since October 2008. The developer said after trading closed that first-half net income increased 28 percent to 3.88 billion yuan ($589 million). The company raised its full-year 2017 contract sales target by 10 percent to 88 billion yuan, The Standard reported Wednesday.
A gauge of energy shares increased 1.1 percent as gasoline rose for a seventh session, while crude fell as traders braced for prolonged refinery and pipeline shutdown
in the U.S. from Tropical Storm Harvey. A measure of technology stocks rose 0.6 percent, the biggest contributor to the MSCI Asia Pacific Index’s gain among the gauge’s 11 industry groups.
Kakao Corp. climbed as much as 5 percent in Seoul after a note from Yuanta Securities Korea highlighted that weekly visitors to the company’s mobile phone
portal website, Daum, jumped 37 percent in the first quarter year-on-year. The stock ended the day up 2.5 percent, the highest close since Oct. 2015.
MSCI’s Asia-Pacific gauge has gained 19 percent so far this year and closed at its highest since 2007 on August 2 amid strong corporate earnings and optimism U.S. interest-rate increases will remain gradual. The gauge has rallied 42 percent since Feb. 12, 2016 when it closed at its lowest in more than three years.

Dollar rises,
treasuries fall on growth optimism
Bloomberg

The dollar rose and Treasuries fell after better-than-forecast data bolstered speculation the US economy may be strong enough to prompt a Federal Reserve move. Gasoline spiked to the highest in two years as
Harvey relentlessly pounded the energy-rich Gulf coast.
US equity futures declined after President Donald Trump renewed concern that the conflict with North Korea could escalate when he said in a Twitter post that the nation “has been talking to North Korea, and paying them extortion money, for 25 years. Talking is not the answer!” European stocks had followed most Asian equities higher earlier on optimism the tensions were easing. US second-quarter growth was revised upward to the fastest pace in two years on stronger household spending and a bigger gain in business investment, putting the economy on a stronger track, Commerce Department data showed on Wednesday.