Asian markets rally after Wall St record, dollar eases

Asian markets rally after Wall St record, dollar eases

HONG KONG: Asian markets rallied on Monday following a record lead from Wall Street, while the dollar remained under pressure after the head of the Federal Reserve suggested it would not speed up its pace of lifting interest rates.

Asian investors were given a strong lead from Wall Street, where there S&P 500 and Nasdaq ended at record highs

Jerome Powell said the US economy was healthy and prices showed no sign of rising more than the bank's two% target, adding that there appeared to be no risk of overheating.

The remarks at the annual Jackson Hole bankers' symposium in Wyoming on Friday were taken by observers as an indication the Fed will stick to its gradual increases in borrowing costs, which weighed on the dollar but provided a boost to equities.

The S&P 500 and Nasdaq closed at fresh records, while the dollar dropped across the board, with Asian traders extending that trend on Monday.

Tokyo ended the morning 0.7% higher, Hong Kong jumped 1.3%, Shanghai added 0.8% and Singapore put on 0.6%. There were also gains in Wellington, Taipei and Jakarta, while Sydney and Seoul were flat.

In forex trading the dollar retreated against its major peers as well as high-yielding currencies, with Mexico's peso boosted by news that US and Mexican officials were close to a deal on a revised free-trade pact.

The yuan also won support after the People's Bank of China said Friday it had made a policy tweak to prevent the currency from falling too sharply.

The central bank adjusted the way it fixes the unit's midpoint each day as it looks to provide more stability at a time when the dollar is broadly in the ascendance.

It also comes as leaders try to temper trade tensions with the United States, with Donald Trump accusing Beijing of keeping the yuan artificially low to boost its exports and offset the impact of tariffs.

The move "should calm both local and international investors that this move does signal the PBoC has no intention of moving into a full-scale currency war in the trade war escalations", said Stephen Innes, head of Asia-Pacific trading at OANDA.

He also said the euro could face headwinds after Italy's populist government threatened to withdraw European Union funding unless it agrees to take some of the 150 people stranded on an Italian coastguard ship.

"I expect the market to start fading on this recent euro move because of Italy's risk, which matters because it's enormous and the ECB is more than content sitting on their hands," Innes said.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 0.7% at 22,759.53 (break)

Hong Kong - Hang Seng: UP 1.3% at 28,018.18

Shanghai - Composite: UP 0.8% at 2,750.64

Euro/dollar: UP at $1.1630 from $1.1623 at 2040 GMT Friday

Pound/dollar: UP at $1.2850 from $1.2847

Dollar/yen: UP at 111.23 yen from 111.21 yen

Oil - West Texas Intermediate: DOWN 10 cents at $68.62 per barrel

Oil - Brent Crude: DOWN nine cents at $75.73 per barrel

New York - Dow Jones: UP 0.5% at 25,790.35 (close)

London - FTSE 100: UP 0.2% at 7,577.49 (close)

Do you like the content of this article?

Holiday season brings little cheer for Hong Kong businesses

Hong Kong's tourism, retail and dining sectors are bracing for the most dismal Christmas season in decades, a slump brought on by what some see as the city's worst political crisis since its return to the mainland in 1997.

9 Dec 2019

Ex-Swedish envoy indicted in HK bookseller case

STOCKHOLM: Prosecutors in Sweden said Monday the country's former ambassador to China has been indicted for unauthorised contacts with a foreign power for organising a meeting in Stockholm between the daughter of a Swedish publisher detained in China, China's ambassador and two businessmen about the possible release of her father.

9 Dec 2019

Police: No signs of life at island eruption site

SYDNEY: New Zealand police said they do not expect to find any more survivors on a volcanic island off the country's North Island where an eruption earlier Monday killed at least five people, according to local media reports.

9 Dec 2019