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Dollar loses altitude, Asia shares touch 11-week high

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SYDNEY: The US dollar nursed widespread losses on Thursday after President-elect Donald Trump’s long-awaited news briefing provided scant clarity on future fiscal policies, disappointing bulls wagering on major stimulus.


Yet neither did Trump mention possible tariffs against Chinese exports, a relief for Asian share markets that have feared the outbreak of a global trade war.


It was enough to help MSCI’s broadest index of Asia-Pacific shares outside Japan climb 0.6 per cent to its highest since late October, wile Shanghai stocks edged up 0.2 per cent.


Shares in Hong Kong fell on Thursday for the first time after a five-day winning streak, with profit-taking mixed with disappointment Donald Trump gave scant policy details in his first news conference since being elected US president.


The Hang Seng Index sank 0.46 per cent, or 106.33 points, to 22,829.02.


The benchmark Shanghai Composite Index gave up 0.56 per cent, or 17.46 points, to 3,119.29 and the Shenzhen Composite Index, which tracks stocks on China’s second exchange, fell 0.87 per cent, or 17.12 points, to 1,951.31.


Tokyo stocks closed down on Thursday as drugmakers were hit by US President-elect Donald Trump’s warning they were “getting away with murder” in overcharging and sending production capacity overseas.


Tokyo’s benchmark Nikkei index fell 1.19 per cent, or 229.97 points, to end at 19,134.70, while the broader Topix index of all first-section issues declined 0.97 per cent, or 14.99 points, to 1,535.41. Spread betters also pointed to a hesitant start for European bourses, with the UK flat and German stocks a touch lower.


Wall Street had overcome its brief wobble to end on Wednesday firmer. The Dow added 0.5 per cent, while the S&P 500 gained 0.28 per cent and the Nasdaq 0.21 per cent.


Health stocks were not so lucky after Trump said pharmaceutical companies were “getting away with murder” by charging high prices.


The S&P 500 healthcare index lost 1 per cent, while the Nasdaq biotechnology index sank 2.96 per cent.


Trump’s first news conference since the Nov. 8 election contained no details on tax cuts and infrastructure spending, two factors that had fuelled the five-week rally in stocks and a selloff in global bond markets.


The uncertainty about what policies will actually be pursued has seen yields on 10-year Treasury notes rally from a 2.64 per cent peak over the last month to stand at 2.334 per cent on Thursday.


The US dollar, likewise, has had to surrender some of its gains in the last week or so. On Wednesday’s session was especially volatile with the dollar rallying hard into the Trump event, only to recoil at his vagueness on policy.


The dollar index dipped 0.3 per cent to 101.520 on Thursday, having been as high as 102.950 at one stage overnight.


The euro had rallied to $1.0602 from a trough of $1.0454, while the dollar lapsed to 114.76 yen from a top of 116.87.


Sterling also bounced from a 10-week low of $1.2048 to reach $1.2203.


In commodity markets, oil was a shade softer after data showed rising US crude inventories. — Reuters


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