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Asia markets begin 2018 on a high, led by rally in Hong Kong
HONG KONG, Jan 2, 2018 (BSS/AFP) – Asian stocks mostly opened the year with
gains on Tuesday as traders drift back to work after the festive break, with
Hong Kong the standout performer, though the dollar faced fresh pressure from
most other currencies.
Regional investors shrugged off dips in New York on the last day of 2017,
instead building on the healthy advances fuelled by strong data, improving
corporate profits and hopes Donald Trump’s tax cuts will fire US growth.
They are also keeping an eye on the release of key US jobs figures at the
end of the week, which will provide fresh clues about the strength of the
world’s biggest economy.
Hong Kong led Tuesday’s rally, jumping 1.6 percent to its highest level
since late 2007, while Shanghai was one percent higher, boosted by data
showing manufacturing activity in China continued to expand in December.
The news comes as China’s leaders look to handle a tricky transition of
the economy from state investment and exports to one driven by consumer
demand, while also addressing a growing debt mountain and fighting pollution.
And Rajiv Biswas, chief Asia-Pacific economist at IHS Markit in Singapore,
warned that Beijing’s success in this would have consequences around the
world.
“Risks to the Chinese economy will remain among the key risks to the
global growth outlook in 2018, with the Asia Pacific region particularly
vulnerable to the shock waves from a slowdown,” he told Bloomberg News.
– Dollar weakness –
Among other markets Singapore rose 0.3 percent after figures showing the
city-state’s economy beat estimates in the final three months of last year.
Seoul added 0.2 percent, with some optimism seen after North Korean leader
Kim Jong-Un said he was open to talks with the South.
Taipei was up 0.4 percent but Sydney slipped 0.2 percent. Tokyo and
Wellington were closed for public holidays.
MORE/MR/ 1047 hrs.
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On currency markets the dollar suffered further selling, with analysts
pointing to profit-taking after the passage of the much-anticipated US tax
cuts, as well as expected monetary tightening by other central banks that
will align them with the Federal Reserve.
Greg McKenna, chief market strategist at AxiTrader, said the euro was
rising as “traders are making the bet that the (European Central Bank) will
simply follow the Fed in the year ahead and end quantitative easing and then
move toward rate hikes”.
The single currency is above $1.20 and sitting at levels not seen since
September, while the pound is also around three-and-a-half-month highs.
However, bitcoin was slightly down from its late Monday levels as the
cryptocurrency struggles to bounce back from a recent sell-off fuelled by
profit-taking. It had soared 25-fold over 2017 to a record high above $19,500
on December 18 before tumbling to just above $12,000 less than a week later.
It was sitting at $13,450 in Asia Tuesday.
– Key figures around 0300 GMT –
Hong Kong – Hang Seng: UP 1.6 percent at 20,385.44
Shanghai – Composite: UP 1.0 percent at 3,339.92
Tokyo – Nikkei 225: Closed for a holiday
Euro/dollar: UP at $1.2020 from $1.2000 at 2200 GMT on Friday
Pound/dollar: UP at $1.3521 from $1.3502
Dollar/yen: UP at 112.70 from 112.68
Oil – West Texas Intermediate: DOWN 11 cents at $60.31 per barrel
Oil – Brent North Sea: DOWN eight cents at $66.79 per barrel New York –
DOW: DOWN 0.5 percent at 24,719.22 (close)
London – FTSE 100: UP 0.9 percent at 7,687.77 (close)
BSS/AFP/MR/ 1047 hrs.