Asia Stocks Swing as Energy Producers Rise, Consumer Shares Fall

(Bloomberg) Asian stocks swung between gains and losses as energy companies advanced and consumer shares slid.

The MSCI Asia Pacific Index was little changed at 146.12 as of 9:16 a.m. in Tokyo after rising as much as 0.1 percent and falling less than 0.1 percent. West Texas Intermediate crude surged 3.4 percent on Tuesday as shale producers curbed output. Yields on 10-year Australian government notes climbed by 10 basis points after U.S. and European debt resumed losses.

“Rising bond yields remains the biggest risk for equities,” Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “There will be further fund flows into China, but whether that’s enough to push the market higher, I’m not sure. Some fund managers probably won’t be able to do anything until such time as MSCI announces its decision.”

MSCI Inc. said mainland Chinese stocks will probably be added to its indexes once market access issues are resolved, deferring a move that could lure billions of dollars to the world’s best-performing market.

Japan’s Topix index slid 0.1 percent. South Korea’s Kospi index added 0.4 percent. New Zealand’s NZX 50 Index slid 0.6 percent, while Australia’s S&P/ASX 200 Index lost 0.1 percent. Markets in China and Hong Kong have yet to open.

China Rally

China’s Shanghai Composite Index fell 0.4 percent on Tuesday after inflation data signaled weaker demand. The gauge rallied 58 percent this year as the government eased policy to revive growth and implemented reforms to rebalance the economy by focusing on consumption instead of investment.

E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent today. The underlying equity rose less than 0.1 percent on Tuesday as banks rallied amid higher bond yields while airlines and technology companies slipped.

Greece retreated from budget concessions to its creditors, setting the stage for another attempt by German Chancellor Angela Merkel and French President Francois Hollande to try to break the country’s financing deadlock. Any remaining bailout funds are off limits unless Greek Prime Minister Alexis Tsipras reaches an accord with creditors. The nation’s financial safety net expires on June 30.

by Jonathan Burgos

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