Stocks rally in Asia loses steam as dollar gains
economies. An Opec meeting will discuss extending supply cuts.TOKYO, Nov 27 — A rally that carried Asian stocks to record highs petered out and the dollar edged up as investors turned their attention to US tax reform ahead of a busy week with data on the health of the world’s biggest
Stocks fell with the biggest declines in Hong Kong, China and South Korea, while Japanese equities erased gains. The Bloomberg dollar index inched higher for the first time in five days as the greenback made gains against most G-10 peers. The South African rand halted its slide triggered by S&P Global Ratings cutting the country’s local-currency debt to junk on Friday, sending the currency 2 per cent lower. Bitcoin was up 16 per cent compared with trading late on Friday.
Economic reports from the US, China, Japan and India this week will allow investors to assess progress for global growth. While equities markets trading at record levels show money managers’ enthusiasm for an earnings expansion as economies grow, bond investors are betting inflation concerns will limit the pace at which interest rates will rise in the US The Organisation of Petroleum Exporting Countries and Russia, a partner in the deal, have crafted the outline of an agreement to extend curbs to the end of next year.
“Given the packed week filled with event risks, I believe Asian investors are taking some money off the table ahead of the US open,” said Jingyi Pan, a market strategist at IG Asia Pte in Singapore. “Tax reform and Opec optimism has given Asian equity markets a substantial boost and both leads will be put to test this week with the Senate’s vote and Opec meeting in tow.”
Asian regional benchmarks are trading close to record highs. The MSCI Asia Pacific Index rose above the 70 level — signalling equities are in overbought territory — on its 14-day average relative strength index on Friday.
Jerome Powell will be in the hot seat tomorrow in Washington when his confirmation hearing begins. Most economists expect the event to go smoothly, but senators will get a chance to probe President Donald Trump’s nominee for Fed chair on his views on the economy and deregulation. Outgoing Chair Janet Yellen will address the Joint Economic Committee of Congress on Wednesday. — Bloomberg
Source: The Malay Mail Online