Asia closes mixed as markets await trio of risks on Thursday; oil edges down

  • Markets were in cautious trade ahead of risk events later this week, including the U.K. election, the European Central Bank review and former FBI Director Comey's testimony to Senate
  • Safe haven assets in demand, with gold and the yen trending higher overnight
  • Oil prices trended lower on diplomatic tensions between Qatar and several Arab states

Asia closed mixed on Wednesday as markets cautiously awaited a trio of potential major risk events on Thursday, including the U.K. election, a European Central bank review and former FBI Director James Comey's testimony to the Senate stateside.

Kiyoshi Ota | Bloomberg | Getty Images

In the U.K., Prime Minister Theresa May's Conservative Party is expected to prevail on Thursday's election, with a poll this morning showing the party could win a larger majority than earlier projected. Another poll conducted in May reflected the Conservatives could lose their parliamentary majority.

Meanwhile, Comey is set to testify on Thursday U.S. time before the Senate Intelligence Committee over whether U.S. President Donald Trump tried to intervene in a probe into former national security adviser Michael Flynn.

The ECB will also conduct its latest monetary review on Thursday with investors looking for a more upbeat tone on the euro zone economy.

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The Nikkei 225 closed the session up by 0.02 percent or 4.72 points at 19,984.62. South Korea's Kospi re-opened after a public holiday to trade lower by 0.36 percent or 8.48 points, finishing the session at 2,360.14.

The S&P/ASX 200 reversed earlier gains to finish flat at 5,667.2.

Markets in greater China were mixed, with Hong Kong's Hang Seng Index trading 0.17 percent down. The Shanghai Composite surged 1.24 percent or 38.4025 points to close at 3,140.5285 and the Shenzhen Composite rose 2.194 percent or 39.7315 points to end at 1,850.5331.

Spot gold was a tick lower, after hitting a seven-week high in the last session. The yellow metal, which traded as high as $1,294.78 an ounce overnight, edged lower to trade at $1,292.30 at 2:45 p.m. HK/SIN.

U.S. Treasury yields gained slightly after falling to their lowest level since last November, with 10-year Treasurys falling as low as 2.129 percent overnight. The 10-year yield traded at 2.1503 percent at 2:45 p.m. HK/SIN.

Investors also piled into the yen. Dollar/yen sank to trade at seven-week lows of 109.28 overnight. Dollar/yen last traded at 109.35 yen.

"With the U.K. election, ECB meeting and Comey's testimony just around the corner, we don't bank on a quick reversal of fortune for the dollar/yen just yet. Now below 110 and the French election gap, the 108.14 lows are within bearish reach," said ThinkMarkets Senior Market Analyst Matt Simpson in a Wednesday morning note.

Meanwhile, the dollar index — which measures the dollar against a basket of six rival currencies — fell to its lowest in more than seven months, trading as low as 96.517 overnight. The dollar index inched higher to trade at 96.580.

Oil prices trended lower after gaining slightly overnight, as markets continued to digest the news that several Arab nations, including Saudi Arabia and the United Arab Emirates (UAE) severed diplomatic ties with Qatar.

U.S. crude was down 0.29 percent to trade at $48.05 a barrel and Brent crude shed 0.3 percent to trade at $49.97.

The complex dispute is front-and-center for oil markets after comments by President Donald Trump lauding Saudi Arabia for the move and as offers of mediation by Turkey and Kuwait seek to calm the waters with Qatar a host to U.S. Central Command forces.

In Australia, real GDP for the first quarter rose 0.3 percent compared to the previous quarter and 1.7 percent on year. The annual pace was higher than the 1.5 percent rise forecast.

The Australian dollar, which was trading around $0.7498 before the release of Q1 GDP, rose as high as $0.7532 at 9:30 a.m. HK/SIN. Aussie/dollar last traded at $0.7546.

Stocks closed lower on Wall Street overnight, with the Dow Jones industrial average edging down by 0.23 percent or 47.81 points to close at 21,136.23.