Investing.com - Shares in Asia gained on Monday with investors cautiously optimistic the damage from Hurricane Irma to Florida, while extensive, was not as bad as expected even as Goldman Sachs (NYSE:GS) trimmed its third quarter GDP growth estimate by 1% based on the impact along with Hurricane Harvey.
Japan's Nikkei 225 jumped a smart 1.44%, while South Korea's Kospi gained 0.79% and the S&P/ASX 200 rose 0.78%. In greater China, the Hong Kong Hang Seng index was up 0.99% and the Shanghai Composite inched up 0.13%.
outh Korean automakers Hyundai Motor and Kia Motors said they were likely to miss their 2017 sales targets, Yonhap reported on Sunday. South Korean exporters have been hit due to a diplomatic tiff with China over the deployment of an anti-missile defense system. Hyundai and Kia shares erased gains seen earlier in the session to fall 0.74% and 0.94% respectively.
The People's Bank of China, intends to ease requirements for financial institutions to set aside foreign-exchange risk reserves for trading yuan forwards as of Sept. 11, Reuters said.
"Scrapping this requirement put in place in October 2015 to curb foreign exchange speculation suggests a more liberalized approach to yuan trading as the PBOC removes some of the defensive mechanism implemented to reduce capital outflow," said Stephen Innes, Asia-Pacific head of trading at OANDA, in a note.
The move comes as the Chinese currency recently erased its entire decline from 2016. The PBOC on Monday set the yuan mid-point at 6.4997 a dollar, the first time the reference point has been set below the 6.5 level since May 2016, Reuters said. The PBOC lets the yuan spot rate against the U.S. dollar rise or fall a maximum of 2 percent from the fixing rate.
The stronger yuan is seen aiding foreign investment and purchases of commodities denominated in dollars.
Last week, U.S. stocks closed mostly lower on Friday, weighed by a slump in energy, after oil prices sunk as Irma hurled towards Florida while a dip in treasuries amid falling expectations of an additional rate hike this year capped gains in financials.
The Dow Jones Industrial Average closed higher at 21,797. The S&P 500 closed 0.15% lower while the Nasdaq Composite closed at 6360.19, down 0.59%.
Financials rebounded from yesterday’s days’ slump which saw shares of Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Citigroup (NYSE:NYSE:C) closed more than 1% lower but gains were limited as treasury yields continued to tumble, reflecting a fall in investor expectations of an additional rate hike this year.
Higher interest rates are seen as boon for banks, boosting net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.
A slump in energy, however, overshadowed gains in Financials after crude prices dropped more than 3% on Friday as traders continued to monitor the impact of Hurricane Irma on oil demand.
Meanwhile concerns over renewed geopolitical uncertainty on the Korean peninsula added to the risk off sentiment on Wall Street, as traders fear North Korea may launch another missile on Saturday to celebrate its 69th anniversary of the founding of the Democratic People’s Republic of Korea.