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Friday June 18th, 2021
International news

Asian markets build on blistering start to year

AFP – Asian markets mostly rose Tuesday, with Hong Kong marking 11 straight wins and Tokyo at a 26-year high, as investors press on with a global rally that has the region enjoying its best start since 2006.

Wall Street provided yet another record lead as eyes turn to the beginning of the corporate earnings season, with sentiment buoyed by strong economic readings and hopes that Donald Trump’s tax cuts will help fire up profits.

"This environment of strong global growth and contained inflation is actually a great environment for Asian equities, including tech," Ajay Kapur, head of Asia Pacific and global emerging market strategy at Bank of America Merrill Lynch in Hong Kong, told Bloomberg TV.

Hong Kong rose 0.4 percent, equalling its best run of gains since October 2012 and putting its record high in view.

Shanghai finished 0.1 percent higher — an eighth-straight gain — and Tokyo closed up 0.6 percent — at its highest close since November 1991 — as traders returned from a long weekend break.

Sydney rose 0.1 percent and Singapore climbed 0.4 percent.

There were also gains in Manila, Wellington and Kuala Lumpur but Wellington and Taipei slipped.

Seoul closed down 0.1 percent after a more than three percent drop in market heavyweight Samsung Electronics, which was hit after its forecast for record fourth-quarter profits missed expectations.

However, while markets continue to push ever higher, there are worries the advances this week could be petering out, and there are also warnings of a sharp correction on the horizon.

– Oil extends gains –

The dollar held on to its gains against the pound and euro, consolidating its recent mini-rebound with the single currency unable to make inroads despite data showing eurozone economic sentiment at its highest since 2000.

However, with Trump’s tax cuts already built in and the European Central Bank expected to begin winding down its stimulus, analysts say the greenback will likely face further pressure from the euro down the line.

On oil markets, both main contracts continued their positive start to the year as major producer Iran is hit by unrest and Venezuela’s economy remains depressed.

"Protest in Iran, and decreasing US crude inventories are providing a stable floor on WTI," said Stephen Innes, head of Asia-Pacific trading at OANDA, said in a note.

He added that while a severe freeze in the northeast of the US would boost demand for heating oil, the temperatures were keeping drivers off the road.

However, he said: "With geopolitical risk extending from Tehran to Venezuela’s economic demise, the market remains on a bullish tack."

In early European trade London rose 0.4 percent, while Paris and Frankfurt each added 0.1 percent.

 – Key figures around 0820 GMT –

Tokyo – Nikkei 225: UP 0.6 percent at 23,849.99 (close)

Hong Kong – Hang Seng: UP 0.4 percent at 31,011.41 (close)

Shanghai – Composite: UP 0.1 percent at 3,413.90 (close)

London – FTSE 100: UP 0.4 percent at 7,726.18

Euro/dollar: DOWN at $1.1944 from $1.1967 at 2200 GMT

Pound/dollar: DOWN at $1.3544 from $1.3567

Dollar/yen: DOWN 112.78 yen from 113.08 yen

Oil – West Texas Intermediate: UP 38 cents at $62.11 per barrel

Oil – Brent North Sea: UP 33 cents at $68.11 per barrel

New York – DOW: DOWN 0.1 percent at 25,283.00 (close)

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