Asia markets extend rally as Hong Kong heads towards record
Hong Kong, (MILLAT ONLINE):Asian traders continued their blistering start to the year on Monday with most markets rising and Hong Kong edging closer to its record high, while the euro extended its gains against the dollar.
Wall Street once again provided a strong lead on the back of optimism about corporate earnings in light of Donald Trump’s tax cuts as well as the improving global economic outlook.
Hong Kong rose for a record 15th straight session, bringing it another step closer to its all-time high of 31,958.41 hit in October 2007. However, profit-taking in the afternoon saw the index pare initial gains.
The Hang Seng Index has climbed more than seven percent in its record run, supported by the broad global advance as well as a surge in mainland investors attracted by relatively cheaper valuations compared with Shanghai and Shenzhen.
Among other markets Tokyo ended 0.3 percent higher despite a stronger yen, with market heavyweight Softbank more than three percent higher on reports it could list its mobile unit, raising up to $18 billion in one of Japan’s biggest public offerings.
Sydney gained 0.1 percent, while Seoul and Singapore were each up 0.3 percent. Taipei, Bangkok and Manila were all higher though Wellington dipped slightly.
Shanghai slipped 0.5 percent after an 11-day winning streak that saw the benchmark index tack on more than four percent.
Jakarta was up 0.1 percent in the afternoon, despite a floor collapsing in the lobby of the building where it is based, injuring a number of people.
Local TV stations earlier reported that trade had been suspended for an hour but stock exchange spokesman Rheza Andhika said trade continued as usual in the afternoon.
– ‘Unstoppable run’ –
“Investors continue basking in the afterglow of US tax reform assuming there will be no end to this unstoppable run, which is now feeding off US domestic economic strength and a stronger global growth narrative,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“As we enter earnings season, the fear of missing out mindset takes hold, but if the markets remain at this pace, we could breach my 2018 year-end global stock market forecast before the end of February, which will for once leave me honestly lost for words.”
The euro added to its gains against the dollar after hitting a three-year high Friday on the back of news that Chancellor Angela Merkel’s CDU/CSU party was close to a deal with the Social Democrats — Germany’s second biggest party — to form a new coalition.
While some members of the Social Democrats were sceptical about the deal, the breakthrough looked to have brought an end to months of uncertainty in Europe’s biggest economy.
That came a day after minutes from the European Central Bank’s December board meeting showed members were considering altering their guidance on policy in light of the eurozone’s improving economy, suggesting it is leaning towards winding down its crisis-era stimulus programme.
The euro was holding above $1.22 in Asia, having surged from around $1.2060 on Friday.
The dollar was also struggling against the yen and pound as dealers brushed aside improving US inflation data, while recent moves by the Bank of Japan have fuelled speculation it is about to tighten monetary policy.
– Key figures around 0710 GMT –
Tokyo – Nikkei 225: UP 0.3 percent at 23,714.88 (close)
Hong Kong – Hang Seng: UP 0.1 percent at 31,433.48
Shanghai – Composite: DOWN 0.5 percent at 3,140.49 (close)
Euro/dollar: UP at $1.2217 from $1.2200 at 2140 GMT on Friday
Pound/dollar: UP at $1.3750 from $1.3737
Dollar/yen: DOWN at 110.70 yen from 110.98 yen
Oil – West Texas Intermediate: UP 17 cents at $64.47 per barrel
Oil – Brent North Sea: UP seven cents at $69.94 per barrel
New York – DOW: UP 0.9 percent at 25,803.19 (close)
London – FTSE 100: UP 0.2 percent at 7,778.64 (close)