TOKYO: Asian stocks rose on Wednesday, joining a record-setting session for global markets as investors cheered upbeat factory activity in Europe and solid earnings on Wall Street.
But the dollar dipped, reversing an earlier rise made on hawkish comments from Federal Reserve officials.
Spreadbetters expected the boon for equities to extend into the European day, predicting a higher open for Britain’s FTSE, Germany’s DAX and France’s CAC.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 per cent, taking its cues from the world stock index rising to an all-time peak overnight.
South Korea’s Kospi added 0.15 per cent, Singapore advanced 0.7 per cent and Hong Kong’s Hang Seng rose 0.9 per cent.
Japan’s Nikkei bucked the trend and shed 0.1 per cent.
The Dow rose 0.6 per cent on Tuesday to notch a record closing high for the eighth straight session, lifted by strong earnings reports from Wal-Mart and Home Depot.
That followed a strong showing in European equities, which were boosted by upbeat German and French factory activity data, with Germany’s DAX rising to its highest in nearly two years.
The euro, however, has not followed suit as the currency markets focused more on potential political turbulence in the euro zone.
The common currency was up a modest 0.1 per cent at $1.0544 after losing more than 0.7 per cent the previous day.
Polls suggesting improving support for far-right French presidential candidate Marine Le Pen have undermined sentiment and weighed on the common currency.
The dollar had risen overnight following hawkish comments from Cleveland and Philadelphia Fed Presidents Loretta Mester and Patrick Harker. Mester expressed comfort at raising rates at this point, while Harker reportedly said a March rate hike was on the table.
Financial markets are waiting on the Fed’s Jan 31- Feb 1 policy meeting minutes due later in the day for fresh hints on the central bank’s stance toward interest rates.
The focus will be on the Fed’s economic assessment in the minutes, which should emphasize a recent uptick in economic data, although the market may still remain sceptical about the chances of a near-term rate hike, said Christopher Wong, senior FX strategist for Maybank.
The dollar slipped 0.2 per cent to 113.485 yen after climbing to a five-day high of 113.780 overnight.
The greenback’s index against a basket of major currencies was a shade lower at 101.340 after gaining 0.5 per cent the previous day.
A recent big mover in currencies was the Mexican peso which rallied against the dollar on news that the country’s central bank will offer up to $20 billion in currency hedges to tame market volatility.
The Mexican currency surged 1.7 per cent against the dollar overnight, breaking the psychological level of 20 per dollar or the first time since Donald Trump’s November US election victory.— Reuters
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