HONG KONG: Asian markets mostly advanced yesterday, picking up the baton from record performances in New York and Europe where traders cheered upbeat US economic data and Donald Trump’s conciliatory speech to Congress.
The US president’s much-anticipated address on Tuesday, while lacking details, was broadly welcomed as he promised a trillion-dollar infrastructure splurge and tax cuts — music to bullish investors’ ears.
Global equity markets have thundered along since Trump’s November election win as dealers bet his policies would light a fire under the US economy.
The fact that he did away with the bellicose rhetoric of the past made him appear more presidential, according to some observers.
“Markets have voted again and it’s clear they liked the version of Donald Trump that they saw yesterday,” Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, said in a note.
“While there was little additional specificity – the so-called meat on the bone – the president’s tone echoed the one that ignited the initial Trumponomics rally during his acceptance speech on election night back in November.”
On Wall Street, the Dow – which until Tuesday had racked up 12 successive record closes – powered past 21,000 points for the first time, while London and Frankfurt also clocked up all-time high finishes.
A strong reading on US factory activity and price rises as well as German inflation also provided support.
The optimism continued into Asia, with Tokyo rallying 0.9 percent thanks to a drop in the yen and Sydney added more than one percent.
Seoul put on 0.5 percent and Singapore jumped 0.4 percent, while Wellington, Taipei, Manila and Jakarta all posted healthy gains. However, Shanghai eased 0.5 percent and Hong Kong reversed early gains of more than one percent to end 0.2 percent lower.
“The overwhelming feeling is positive,” Karl Goody, a private wealth manager at Shaw and Partners in Sydney, told Bloomberg News. “There’s a huge thirst and ultra-high demand from people with money trying to find a home. This is going to continue.”
The dollar built on Wednesday’s advance after Federal Reserve Governor Lael Brainard, usually considered a dove, said she supported the case for an interest rate hike “soon”.
That came a day after two regional Fed presidents said they saw a strong case for tighter borrowing costs, while Fed boss Janet Yellen is due to give a speech Friday.
The greenback pushed above 114 yen for the first time in two weeks on growing expectations of a rate increase this month.
“Investors were sponging up the plethora of suggestive Fed commentary overnight, President Trump’s State of the Union speech, and a profusion of economic data,” said Stephen Innes, a senior trader at OANDA, adding that a Fed move was odds-on and the dollar would likely hit 115 yen.
In early European trade London and Frankfurt each fell 0.1 percent but Paris added 0.1 percent. – Reuters
