SYDNEY: Asian shares inched ahead on Wednesday while the dollar and commodities held gains as investors shook off disappointment about US President Donald Trump’s failed healthcare bill and focused on an improving outlook for global growth.
The good cheer did not extend to the pound which was on the skids as the British government sent a letter to Brussels formally starting the country’s exit from the European Union.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent and back towards recent 21-month peaks.
Australia’s main index climbed 0.8 per cent to its highest since mid-2015.
Japan’s Nikkei added 0.1 per cent, with a number of ex-dividend stocks cutting around 130 points from the index.
Spreadbetters pointed to moderate opening gains for European bourses, while S&P 500 futures added 0.1 per cent.
The Dow snapped an eight-day losing streak, its longest run of losses since 2011, in part as a survey showed consumer confidence surged to a more than 16-year high.
“Economic fundamentals still remain exceedingly sound here in 2017 and you do not need Trump’s pro-growth fiscal agenda for this to be one of the best years for growth since the recovery started,” argued Tom Porcelli, chief US economist at RBC Capital Markets.
“We still think tax reform happens, but you are better off thinking about the timing as an end of year event at best.”
The Dow ended on Tuesday up 0.73 per cent, while the S&P 500 gained 0.73 per cent and the Nasdaq 0.6 per cent.
The dollar bounced from 4-month lows as a top Federal Reserve official talked of more rate hikes to come while political uncertainties surrounding Britain’s exit from the EU pressured European currencies.
Fed Vice Chairman Stanley Fischer, one of the more influential policymakers with markets, said two more rate increases this year seemed “about right”.
The pound shed a further 0.3 per cent to $1.2414 after British Prime Minister Theresa May signed a letter notifying the EU of Britain’s intention to leave the bloc.
The Brexit letter is due to be delivered to Brussels later on Wednesday, triggering years of uncertain negotiations that will test the endurance of the European Union.
That came a day after the Scottish Parliament voted in favour of a second independence referendum that would break up the UK.
The euro pulled back to $1.0811, while the dollar bounced to 111.20 yen. Against a basket of currencies, the dollar was steady around 99.756.
The biggest loser overnight was the South African rand which has shed almost five per cent in two sessions on speculation Finance Minister Pravin Gordhan might lose his job. In commodity markets, base metal prices bounced on more upbeat economic news from China with copper gaining 2 per cent overnight.— Reuters
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