Hong Kong: The global rally in stocks pushed into another day, with Tokyo leading a surge in Asian markets on Thursday following another record close on Wall Street that saw the Dow hit a historic milestone.
After weeks of unease across trading floors, investors around the world have refound the optimism that fuelled a surge in the two months after Donald Trump was elected president.
The latest lease of life comes after the tycoon signed a series of executive orders pushing his pro-growth agenda, including giving the green light to two huge, controversial oil pipeline deals through the United States.
There are hopes he will press on with other promises to ramp up infrastructure spending, cut taxes and do away with various regulations he considers a hindrance to businesses.
Added to this were a series of upbeat earnings reports from big-name firms including Boeing and United Technologies.
In New York the Dow ended above 20,000 for the first time in its history, while the S&P 500 and Nasdaq also closed at all-time highs as investors shift back to higher-yielding investments and away from safe bets such as bonds.
Asian dealers tracked their counterparts on Thursday, with Tokyo ending 1.8 per cent higher. Hong Kong added 1.3 per cent in the afternoon and Shanghai gained 0.3 per cent on the last day before a week-long Lunar New Year break. China shares rose for the fifth straight day on Thursday, with blue chips closing at fresh six-week highs, but gains were curbed after profits earned by industrial firms grew at a sharply slower pace last month.
Market turnover stayed thin on the last trading day before the Lunar New Year, China’s biggest holiday. Markets will be closed from Jan. 27 to Feb. 2.
The blue-chip CSI300 index rose 0.4 per cent, to 3,387.96 points at the close, while the Shanghai Composite Index gained 0.3 per cent, to 3,159.17 points.
For the week, the CSI rose 1 per cent and the SSEC 1.2 per cent. For the month, the CSI rose 2.4 per cent and the SSEC 1.8 per cent. The market’s bullish sentiment was countered by data showing profits earned by Chinese industrial firms in December grew more slowly at 2.3 per cent compared with November’s 14.5 per cent.
Cao Xuefeng, head of research at Huaxi Securities in Chengdu, said the slower pace was partly due to seasonal factors as many workers had already left the factories for their home towns ahead of the new year.
Sector performance was mixed in China. An index tracking the resource stocks were among the best performers, up 1.4 per cent at the close.
Seoul jumped 0.8 per cent and Singapore 0.4 per cent, while Wellington, Manila and Jakarta also pushed upwards. Sydney was closed for a public holiday.
“The US economy is doing well, corporate earnings are good and it looks like Mr Trump’s policies will keep improving the economy,” Mitsushige Akino, an executive officer at Ichiyoshi Investment Management Co. in Tokyo, told Bloomberg News. “With bond yields increasing, we’re seeing gradual moves from bonds to risk assets.”
The dollar recovered from recent losses against its major peers although it is struggling to break out of tight band as investors mull comments from Trump and his nominee for Treasury Secretary Steve Mnuchin that the unit is too strong and could hurt the US economy.
“We may have underestimated... investor sentiment towards Mnuchin and Trump’s comments on the dollar,” said Stephen Innes, senior trader at OANDA, in a note.
The US unit’s general weakness also saw it tumble more than two per cent against the Mexican peso despite news Trump had ordered work to begin on planning and building a wall along the US-Mexico border.
The dollar bought a little more than 21 pesos on Thursday, well down from the record levels above 22 pesos touched earlier this month.
— AFP
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