SINGAPORE: Stocks in Asia extended gains on Thursday as optimism on Wall Street over trade deals and corporate earnings shored up investor confidence across the region, while the euro was steady ahead of the European Central Bank policy meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4%, hitting a near four-year peak after US stocks ended the previous session at a record high.
The bullish mood is set to continue in Europe. Pan-European futures were up 1.17%, German DAX futures rose 1.15%, and FTSE futures gained 0.39%.
Tokyo's Topix and Singapore's benchmark index both climbed above previous highs, while the Nikkei 225 extended Wednesday's gains, nearing its record high hit last year.
Traders are speculating that the US may soon reach a trade agreement with the European Union, after the Trump administration struck deals with Japan, the Philippines, and Indonesia earlier this week.
"There's nothing like a trade deal with a big trading nation – and deals with the Philippines and Indonesia, and the prospect of a deal in the offing for Europe – for markets to throw away all their caution," said NAB senior market strategist Gavin Friend. "Yields are higher and everything seems rosy at the moment." Markets were relatively subdued after the White House said US President Donald Trump will visit the Federal Reserve on Thursday, a surprise move that escalates tension between the administration and Fed Chair Jerome Powell. The Fed is expected to hold rates steady next week.
"The purpose of Trump’s visit to the Fed is unclear but it may be a move to pressure Powell and the Fed to cut rates, and it comes just a few days before the next Fed policy meeting at the end of this month," said Vasu Menon, managing director of investment strategy at OCBC.
The dollar dropped 0.31% against the yen to 146.03. It remains above its April low of 139.89. The euro last fetched $1.1774, after hitting a more than two-week high earlier in the session.
US stocks posted solid gains on Wednesday, with the Dow adding more than 1%, the S&P 500 climbing over 0.75%, and the Nasdaq gaining around 0.6%.
Gold edged lower as easing trade tensions reduced demand for safe-haven assets, outweighing support from a weaker dollar. Spot gold traded at $3,382.79 per ounce. — Reuters
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