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2 August, 2017 00:00 00 AM
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Strong earnings, economic data push Asia markets higher

AFP
Strong earnings, economic data push Asia markets higher
Asia markets started the month on a high yesterday, buoyed by strong earnings results and gathering optimism over the global economy, even as the dollar came under fresh pressure from instability in the White House. AFP Photo

AFP, HONG KONG:  Asia markets started the month on a high yesterday, buoyed by strong earnings results and gathering optimism over the global economy, even as the dollar came under fresh pressure from instability in the White House.

Equity indexes from Shanghai to Seoul chalked up gains, with confidence fuelled by positive Chinese manufacturing data and figures showing South Korean exports surged 20 percent in July from a year earlier.

Tokyo stocks also closed up as investors digested earnings results. Electronics giant Sony beat forecasts to report that net profits quadrupled in the three months to June, backed by brisk sales of smartphone components and solid revenue from its game business.

But a strong yen capped increases, with the safe-haven currency holding gains against the greenback as Washington was plunged into renewed uncertainty after foul-mouthed spin doctor Anthony Scaramucci was axed as White House communications director—just 10 days after being hired.

“The Washington political train wreck and month end flow has left the US dollar teetering on the brink of a cliff,” said Stephen Innes, who heads Asia-Pacific trading at Oanda.

“After struggling through a torturous time last week, and just when it appeared the USD onslaught had abated, the dollar bulls were swallowed up.”

However, the market remained cautious ahead of US payroll figures to be released on Friday.

“It’s difficult to envision more dollar selling ahead of the US economic data,” Innes added.

The Dow shrugged off the latest developments in the Trump administration to finish at its fourth straight record as analysts said sentiment on Wall Street remains upbeat in the wake of largely positive earnings reports.

Shanghai shares closed at a 2017 high after data from Caixin Purchasing Manager’s Index—an indicator of conditions at small manufacturers—showing China’s manufacturing activity increased last month as both production and new order rates grew rapidly.

Elsewhere in Asia-Pacific, Sydney’s main index recorded gains of almost one percent after Australia held interest rates at a record low of 1.50 per cent.

But the central bank warned that the strengthening “Aussie” was hurting an already soft domestic economy.

“An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast,” Reserve Bank of Australia governor Philip Lowe said in a statement.

The stronger language failed to move the currency substantially, with the Australian dollar little changed at about 80 US cents.

The local unit was trading around 76.4 US cents when the RBA released its last rate decision in early July.

Europe’s main stock markets climbed at the start of trading following leads from Asia and Wall Street.

Oil held gains with the WTI contract trading above $50 per barrel for the first time since May amid optimism that output curbs are cutting back oversupply and reducing stockpiles.

“The extent of the drop in US inventories over recent weeks has been quite constructive and the market is responding to that,” said Ric Spooner, an analyst at CMC Markets in Sydney.

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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