Asian Markets Up with Wall St on Growth Optimism
Asian markets rose Friday, tracking a rally on Wall Street where investors were buoyed by the Federal Reserve's positive outlook for the U.S. economy, and oil added to gains with predictions it could be headed back to $100.
While concerns over the China-U.S. trade row hang in the air, equities continue to be supported by optimism that the global economy and companies are in rude health.
That was reinforced by the Fed Wednesday as it lifted interest rates and indicated more to come over the next year citing the strong labor market and playing down concerns about vulnerabilities in the financial system.
"One thing that's telling is the current price action which sees investors continually coming back for more. That suggests the gushing U.S. economy and not trade wars, continues to influence investors' decisions," said Stephen Innes, head of Asia-Pacific trading at OANDA.
All three Wall Street indexes ended with gains and Asia followed suit.
Tokyo led the way, ending 1.4 percent higher as exporters were boosted by the weaker yen, which is at its lowest level against the dollar this year.
Shanghai gained 1.1 percent, Sydney rose 0.4 percent and Singapore climbed 0.6 percent. Wellington added 0.7 percent while there were also solid performances in Manila, Mumbai and Jakarta.
Hong Kong added 0.3 but property firms were again hit after the city's banks on Thursday lifted commercial lending rates for the first time in 12 years following the Fed hike.
Seoul and Taipei ended lower.
- Euro extends losses -
While the prospect of higher U.S. rates has lifted the dollar, the upbeat mood is also helping emerging market and high-yielding currencies, which have been swiped in recent weeks by the trade war fears.
The South Korean won, Indonesian rupiah, Thai baht and Mexican peso were all being well bought while the Turkish lira jumped more than one percent, despite ongoing concerns about the country's economy.
The euro continued fell further after losing almost one percent Thursday as Italy's populist government agreed on a budget deficit target of 2.4 percent of gross domestic product for next year, fueling fears of a bust-up with Brussels.
On Friday those fears looked to be coming to fruition when EU Commissioner Pierre Moscovici hit out at the Italian move, which he called "beyond the limits of our shared rules."
In early trade London shed 0.2 percent, while Paris and Frankfurt were 0.5 percent lower as traders were rattled by the brewing row.
Crude prices extended gains on growing concerns about supplies following a decision not to increase output by key producers, just as Iran faces export sanctions and Venezuela continues to be dogged by political and economic crises.
Also, the US energy secretary this week ruled out using the country's emergency stockpiles to ease a prices.
Bloomberg News reported that the chief executive of oil and gas major Total, Patrick Pouyanne, saw prices swinging to the $100 levels last seen in mid-2014.
"Everyone’s worried about the tightness in supply at the moment and that’s continuing to push up prices," Will Yun, a commodities analyst at Hyundai Futures, said. "But volatility is coming as we’re still waiting for further response from the U.S."
- Key figures around 0810 GMT -
Tokyo - Nikkei 225: UP 1.4 percent at 24,120.04 (close)
Hong Kong - Hang Seng: UP 0.3 percent at 27,788.52(close)
Shanghai - Composite: UP 1.1 percent at 2,821.35 (close)
London - FTSE 100: DOWN 0.2 percent at 7,528.39
Euro/dollar: DOWN at $1.1624 from $1.1641 at 2100 GMT
Pound/dollar: DOWN at $1.3066 from $1.3078
Dollar/yen: UP at 113.44 yen from 113.39 yen
Oil - West Texas Intermediate: UP 15 cents at $72.27 per barrel
Oil - Brent Crude: UP 13 cents at $81.85 per barrel
New York - Dow Jones: UP 0.2 percent at 26,439.93 (close)
Source: Agence France Presse
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