ASIA MARKETS: Asian Markets Tick Up Ahead Of Trump's Address To Congress
28 February 2017 - 3:55PM
Dow Jones News
By Ese Erheriene
Nikkei rises despite poor economic data; oil firms gain on
higher crude prices
Investors in Asia regained their risk appetite on Tuesday,
catching an updraft from gains in U.S. markets, ahead of Donald
Trump's speech to Congress.
The Nikkei Stock Average rebounded from Monday's losses to stand
0.7% ahead in midday trading, shrugging off poor economic data.
Japan posted its first drop in industrial output in six months in
January, as production of cars fell and the Lunar New Year holiday
lowered demand from China, an important export market.
Elsewhere, Australia's S&P/ASX 200 was 0.4% higher, Korea's
Kospi added 0.3%, and the Shanghai Composite Index was last up
0.3%.
Overnight in the U.S., a rally in energy, financial and
biotechnology shares lifted the major indexes. The Dow Jones
Industrial Average rose 16 points to close at its 12th consecutive
record high, the S&P 500 rose 0.1%, and the Nasdaq Composite
added 0.3%.
Rebounding from sharp losses in the previous session, Asian
stock markets were back in the black in anticipation of Trump's
speech to Congress on Tuesday, following a budget proposal from the
White House on Monday that would boost military spending by around
$20 billion.
"The market is currently holding this wait-and-see attitude,"
said Jingyi Pan, a market strategist at IG Group. "There will be a
few things that the market will hunt for in his address today.
These include tax, infrastructure and trade policies."
Meanwhile, hawkish comments from Federal Reserve Bank of Dallas
President Robert Kaplan overnight renewed market expectations for
more U.S. rate increases in the coming months. According to CME
data, the likelihood of a rate rise in March is 33.2%, up from
26.6% the previous day.
Kaplan's comments proved bullish for Treasury yields and dollar
strength against the yen overnight, which gave an updraft to local
financial companies and exporters. Among individual shares,
Australia's Big Four banks -- which account for roughly a third of
the benchmark index's weighting -- were up between 0.7% and 1.4%.
In Japan, Nomura (8604.TO) was up 1.9% and Dai-ichi Life (8750.TO)
gained 1.1%, while auto makers Honda Motor (HMC) and Mazda Motor
(7261.TO) added 1.0% and 1.9%, respectively.
In Hong Kong, stocks bucked the regional trend as positive
drivers from the U.S. were offset by concerns over the shifting
regulatory environment in China. The benchmark Hang Seng Index was
last down 0.1%.
"The Hang Seng Index is a global index and...there are
conflicting drivers," said Woon Tian Yong, an investment analyst at
Phillip Futures. "On the one hand, there has been optimism from the
Trump rally and expectations for his policies. On the other hand,
the HSI is dampened by developments in the Chinese equities space,
as...some regulatory shake-ups [there] cause the HSI to lose its
momentum for the third straight session."
In the commodities market, oil prices rose 0.2%, building on
gains in the U.S. session. This supported the bottom lines of oil
and gas firms across the region. Japan Petroleum Exploration
(1662.TO) was 2.6% higher, Australia's Santos (SSLTY) was up 2.5%
and Hong Kong-listed oil major China Petroleum & Chemical
(600028.SH) rose 0.2%.
In currencies, the dollar-yen pair saw some profit-taking, with
the dollar recently down 0.1% at Yen112.59 from a high of Yen112.82
yen in early Tokyo trade. Along with some profit-taking, there may
have been trades to position ahead of Trump's speech, said Masahi
Murata, a senior currency strategist at Brown Brothers
Harriman.
Looking ahead, market participants will be watching out for the
second estimate of French fourth-quarter gross domestic product
later in the global trading day, and positioning for Chinese
manufacturing data on Wednesday.
(END) Dow Jones Newswires
February 27, 2017 23:40 ET (04:40 GMT)
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