Comments
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.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent, taking its cues from the world stock index rising to an all-time peak of 446.21 overnight.
South Korea's Kospi added 0.1 per cent, Shanghai climbed 0.2 per cent and Hong Kong's Hang Seng rose 0.7 per cent. Japan's Nikkei bucked the trend and shed 0.2 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.
“US stock markets are currently a great example of the old trading adage that the trend is your friend,” wrote Ric Spooner, chief market analyst at CMC Markets.
“The slide in the euro as Marie Le Penn's polls improve was the other key feature of international markets last night and is an early indicator that French elections could loom larger on the market radar over coming weeks.”
The euro inched up 0.1 per cent to $1.0549 after losing more than 0.7 per cent the previous day.
While the European political concerns remain a drag on the euro, the dollar had received further support 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 towards interest rates.
The dollar slipped 0.3 per cent to 113.350 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 101.270 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 peso 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 U.S. election victory. Trump's threats to impose trade barriers on Mexico had recently pushed the peso to record lows.
“This is the most important change in the approach to FX policy since the Tequila Crisis,” said Marco Oviedo, an economist at Barclays in Mexico City, referring to the economic crisis that pushed Mexico to adopt a free-floating peso in 1994.
The Australian dollar, which has enjoyed steady gains this year on country's relatively high yields and the rise in the price of iron ore, climbed 0.3 per cent to $0.7696.
In commodities, crude extended gains from the previous day when it touched 1-1/2-month peaks on OPEC's optimism for greater compliance with its deal with other producers including Russia to curb output.
Brent crude rose 0.5 per cent to $56.92 a barrel and U.S. crude added 0.4 per cent to $54.53 a barrel.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.