Asian markets start week with rally, tracking US lead

Jan 9, 2017
With little to drive business from Asia, investors followed their US counterparts, who remain upbeat that President-elect Donald Trump will introduce measures that will fire the world's top economy. - AFP
With little to drive business from Asia, investors followed their US counterparts, who remain upbeat that President-elect Donald Trump will introduce measures that will fire the world’s top economy.

Asian markets rose on Monday, tracking a strong lead from New York where two of the three main indexes closed at record highs.

With little to drive business from Asia, investors followed their US counterparts, who remain upbeat that President-elect Donald Trump will introduce measures that will fire the world’s top economy.

Friday’s US jobs report provided mixed signals as it showed fewer than expected posts created last month but that November’s figures were upgraded. It also said average hourly earnings rose from the prior month.

On Wall Street, the Dow moved to within 0.37 points of the 20,000 mark before easing back slightly but the Nasdaq and S&P 500 each ended at all-time highs.

The upbeat readings filtered through to Asia, where Hong Kong added 0.2% in the late afternoon, Sydney ended 0.9% higher and Singapore put on 0.6 percent.

Chinese stocks finished moderately higher, helped by purchasing of defence shares on hopes of government reform in the sector. The benchmark Shanghai Composite Index rose 0.5 percent.

Seoul finished flat while Jakarta dipped by 0.4 percent in late afternoon trading.

Tokyo was closed for a public holiday.

Stephen Innes, a senior trader at OANDA, said the focus would now be on a speech by Federal Reserve boss Janet Yellen on Friday, which would be pored over for clues about the bank’s outlook for its next interest rate hike.

With Trump’s promises of big spending and tax cuts expected to fuel inflation, bets are on the Fed to hike rates at least three times this year, after December’s increase.

“Given the markets focus on all things Feds, we could be in for bustling (Asia-Pacific) session at the end of the week,” he said.

In China the yuan resumed its downward slide as officials weakened its value against the dollar by the most in six months, having hiked it at the end of last week.

The People’s Bank of China set the reference rate of the yuan — also known as the renminbi — at 6.9262 to the dollar, down 0.87 percent from Friday’s level, according to data from the Foreign Exchange Trade System.

It marked the biggest single-day drop since June and comes right after Friday saw the biggest jump in the reference rate — by 0.92% — since 2005.

In other Chinese market activity, US fast-food giant McDonald’s announced plans to sell its mainland China and Hong Kong business for up to $2.08 billion to a consortium including state-owned Citic and the Carlyle Group,  as part of an international turnaround plan as it struggles with sluggish growth at home.

Citic Limited, Citic Capital Holdings, Carlyle Group and McDonald’s will form a company that will act as the franchisee for the chain’s business in mainland China and Hong Kong for 20 years, the companies said in a joint statement. – AFP

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