Asian stocks resume ascent on earnings hopes, euro gets lift from ECB
Central Bank signalled an end to its massive stimulus.TOKYO, Jan 12 — Asian stocks resumed their ascent today, supported by US earnings optimism and a rise in oil prices while the euro edged higher as the European
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent, following two straight sessions of decline. Japan’s Nikkei dipped 0.1 per cent.
Wall Street’s three major stock indexes hit record highs with earnings for S&P 500 companies expected to have increased by 11.8 per cent in the recently-ended quarter, according to Thomson Reuters I/B/E/S.
MSCI’s broadest gauge of the world’s stock markets also hit a record high yesterday, having risen in seven of the eight business days so far this year for a total increase of 3.3 per cent.
The energy sector led the gains as oil prices rose to three-year highs while interest rate sensitive-sectors, such as utilities and real estate companies, underperformed.
US Treasury yields fell yesterday after China disputed a media report that its government officials had recommended the country slow or halt its purchases of US bonds.
China’s currency regulator dismissed the report but said it is diversifying its foreign exchange reserves in order to safeguard their value.
The 10-year Treasuries yield stood at 2.550 per cent, off Wednesday’s 10-month high of 2.597 per cent.
On the other hand, the benchmark German 10-year Bunds yield hit a five-month high of 0.532 per cent after accounts of the ECB’s December meeting showed it thinks it should revisit its communication stance in early 2018.
With the euro zone seeing its best growth in a decade, the ECB should gradually shift its stance to avoid a more disruptive move later and look at a broader revision of its policy guidance to reduce the focus on bond purchases and raise the emphasis on interest rates, they showed.
“I would imagine the ECB is dying to give it a try to end negative interest rates after September. If that doesn’t go down well in markets, the bank will modify its message but it should want to at least test the water,” said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management.
The euro rose back above US$1.2 and last traded at $1.2040, near its three-month high of US$1.2089 touched last week.
The US currency slipped to a six-week low of 111.05 yen yesterday and last stood at 111.21 yen.
Bitcoin flirted with this year’s low, having fallen 11.1 per cent yesterday after the government in South Korea, one of a major source of digital currency demand, unveiled plans to ban cryptocurrency trading.
On the Bitstamp Exchange, it traded at US$13,000 (RM52,000), down 1.6 per cent in early Asian Friday trade. It has lost 6 per cent so far this year.
Oil prices retreated from big gains the previous day but still traded near three-year highs on signs of tightening supply in the United States.
US West Texas Intermediate (WTI) crude futures changed hands at US$63.55, down 0.4 per cent on the day.
Brent crude futures settled 6 cents higher at US$69.26 a barrel yesterday, after hitting US$70.05 a barrel during the session, its highest level since November 2014. Brent’s settlement still represents a three-year closing high.
Brent has gained 5 per cent since the beginning of the year, picking up from its late-year surge. — Reuters
Source: The Malay Mail Online