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Asian markets stage rally after strong Wall St lead
HONG KONG, Oct 17, 2018 (BSS/AFP) – Asian markets staged a much-needed
rally Wednesday as investors tracked Wall Street’s best performance in more
than six months thanks to a healthy round of earnings reports.
Bargain-buyers took advantage of the strong readings from some of the
world’s top firms to step back into the mix, with a dip in US Treasury yields
and Washington’s announcement of trade talks with Japan, the EU and Britain
helping sentiment.
The news helped distract from long-running worries about the US-China
trade war which shows no sign of abating.
Investors are now awaiting the release later in the day of minutes from
the Federal Reserve’s most recent policy meeting, hoping for some insight
into its plans for interest rates in light of fresh strong data on the US
economy.
All three main indexes in New York piled on more than two percent Tuesday,
the best daily performance since March, in response to a string of positive
results from the likes of Netflix, Goldman Sachs, Johnson & Johnson and
UnitedHealth Group.
And the gains filtered through to Asia, where Tokyo ended 1.3 percent
higher thanks to a pick-up in the dollar against the yen, while Shanghai
gained 0.6 percent.
Sydney, Seoul, Singapore, Wellington and Manila each put on more than one
percent.
Hong Kong was closed for a public holiday.
In early European trade London rose 0.4 percent, while Frankfurt and Paris
both added 0.3 percent.
“The earnings that came through overnight definitely is something the
market has been waiting for to really change the sentiment,” IG Asia market
strategist Jingyi Pan told Bloomberg TV.
– Dollar dips –
But Stephen Innes, head of Asia-Pacific trade at OANDA, said: “Perhaps a
bit surprising is that local equity markets are not exactly knocking it out
of the park this morning.
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“I suspected they would take their lead from the US equity froth. But
again, local dealers remain a better seller of risk until a definitive shift
in US-China trade tensions is offered up.”
On currency markets the dollar was down against most high-yield and
emerging market economies as traders came out of their shells after recent
selling.
Ray Attrill, head of forex strategy at National Australia Bank, suggested
US President Donald Trump’s latest outburst against the Fed’s rate hikes,
which he claims are excessive, were weighing on the dollar.
“While such name calling shouldn’t mean anything in terms of what the Fed
actually does, it is a factor which somewhat undermines sentiment towards the
dollar,” he said.
“We’d argue, (it) is a contributory factor, albeit minor, to recent poor
performance of the US dollar in the face of first higher US yields, then last
week’s sharp turn for the worse in US equity market.”
Oil prices edge up after data showed a drop in US stockpiles but investors
are also keeping an eye on Riyadh, with major producer Saudi Arabia under
pressure over the disappearance of journalist Jamal Khashoggi.
The issue has strained relations between the Saudis and other countries,
with Turkish claims he has been killed leading to a wave of cancellations
among big companies who had been scheduled to appear at a business conference
in Riyadh next week.
– Key figures around 0720 GMT –
Tokyo – Nikkei 225: UP 1.3 percent at 22,841.12 (close)
Shanghai – Composite: UP 0.6 percent at 2,561.61 (close)
Hong Kong – Hang Seng: Closed for a public holiday
London – FTSE 100: UP 0.4 percent at 7,084.67
Euro/dollar: DOWN at $1.1565 from $1.1577 at 2030 GMT
Pound/dollar: DOWN at $1.3180 from $1.3187
Dollar/yen: UP at 112.30 from 112.26 yen
Oil – West Texas Intermediate: UP 23 cents at $72.15 per barrel
Oil – Brent Crude: UP 25 cents at $81.66 per barrel
New York – Dow Jones: UP 2.2 percent at 25,798.42 (close)
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