Most Asian markets rise as 2018 rally extends

The equity rally that has kicked off 2018 continued on Friday, with Asian markets picking up the baton from another set of records on Wall Street.

Dealers are now turning their attention to the release later in the day of key US jobs data, which is expected to show the world’s top economy continuing to improve.

A forecast-smashing reading Thursday on private take-ups boosted optimism, which had already been bolstered by US tax cuts, healthy corporate profits and strong manufacturing figures from around the world.

Global markets powered ahead in 2017 as economies showed long-running improvements after years of faltering.

Greg McKenna, chief market strategist at AxiTrader, said in a note that data from the manufacturing and services sectors “suggests economic strength across the globe remains robust”.

He noted that an index of world factory activity was at its highest level in seven years.

On Wall Street, the Dow ended above 25,000 for the first time, leading records across Wall Street.

In Tokyo, the Nikkei ended up 0.9 percent at a 26-year high following its more than three percent jump Thursday, while Sydney added 0.7 percent.

Seoul rose 1.3 percent, with dealers buoyed by news that North Korea had accepted the South’s offer of talks next week, further easing geopolitical tensions in the region.

Hong Kong gained 0.3 percent to chalk up a ninth-straight gain, while Shanghai closed 0.2 percent higher but Singapore eased 0.2 percent.

Pause in oil?

While oil prices inched down in Asia, they remain elevated after recent rises to around three-year highs thanks to Middle East tensions, while the US sees stockpiles fall as it is hit by a severe cold snap.

The latest gains have given impetus to petroleum-linked firms, sending them rallying this week. In Hong Kong, Sinopec was up more than one percent while CNOOC and PetroChina were also higher. Woodside Petroleum in Sydney was up along with Santos, though Tokyo-listed Inpex eased.

However, Ric Spooner, a Sydney-based analyst at CMC Markets, told Bloomberg News: “There’s been a one-way, very steep and uninterrupted rally off the last minor low in mid-December near $56, so it won’t be surprising to see a pause here.”

On forex markets, the dollar rose slightly against the euro, but the single currency remains buoyant with the eurozone continuing to improve, which raises the chances of a reduction in the region’s massive stimulus programme, bringing monetary policy in line with the Federal Reserve.

McKenna added: “It’s again the story of a weaker US dollar as the fact its data is solid and improving is lost on traders focused on expectations that the EU strength will drive the European Central Bank to chase the Fed, and that synchronised global growth will, in fact, drag most central banks along the tightening path.”

In early European trade, London was flat, Paris rose 0.3 percent and Frankfurt added 0.4 percent.

source: business.inquirer.net

US stocks end at records, lead global equities higher

NEW YORK, United States — All three major US equity indices rose to fresh records Wednesday on solid earnings and higher oil prices, concluding a sunny session for global equities.

The Dow, S&P 500 and Nasdaq all ended at new peaks as investors shrugged off worries about Washington, where President Donald Trump’s agenda has languished amid opposition to his health care reform proposal.

Bourses in Europe were higher ahead of Thursday’s European Central Bank meeting. Tokyo, Hong Kong and Shanghai also all rose.

Earnings growth among companies in the S&P 500 has thus far been “much better” than expected, said Art Hogan, chief market strategist at Wunderlich Securities.

“That is helping the stock market and is the focus this week,” Hogan said.

Other elements that helped boost stocks included better-than-expected housing data and a bullish US oil inventory report that supported oil prices and boosted shares of petroleum-linked companies.

Maris Ogg, president of Tower Bridge Advisors, said sentiment has also been boosted by the improved outlook in Europe following the election of French president Emmanuel Macron as well as the recognition that Trump is a business-friendly president, even if his agenda looks uncertain.

“The market is recognizing we are in a pretty good environment and we are at the beginning of a cycle that could on for quite a while,” Ogg said.

Among US companies reporting results, Morgan Stanley surged 3.3 percent, but IBM and United Continental fell 4.2 percent and 5.3 percent after investors found fault with results.

Euro pulls back

The euro surged Tuesday to a near 15-month pinnacle at $1.1583, but pulled back to $1.1513 on the eve of the ECB.

ECB chief Mario Draghi has expressed greater confidence in the economy in recent weeks and analysts are looking for him on Thursday to continue to prepare the ground for an eventual shift away from easy-money policy later this year through a tapering of the bond purchases.

Still, Kathy Lien, managing director of BK Asset Management, said ECB officials have been unnerved by the rise of the euro of late and warned the central bank will want to avoid giving the currency a further boost.

“It is in their best interest to halt the one-way move, ease the euro off its highs by repeating that inflation is not on a self-sustainable path, and then gradually set expectations for taper from a lower base,” she said.

“That way… they could take the steam out of the rally.” CBB

source: business.inquirer.net