The Indian Panorama

Tag: Asian

  • Asian shares rise as Chinese markets return from break

    Asian shares rise as Chinese markets return from break

    HONG KONG (TIP): Asian shares rose on Friday, October 8,  as Chinese shares returned from a one week holiday upbeat, tracking a global rally, while investors also eyed key U.S. jobs data for any fresh insight into the timing of Federal Reserve tapering.

    MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%, after rallying 2.1% the day before, its biggest daily gain since August. Japan’s Nikkei index advanced 1.8%.

    Chinese blue chips gained 0.56% as they resumed trading after being closed for the National Day holiday, while Hong Kong , which has been open all week, gained 1%.

    Elsewhere, Australian shares  rose 0.84%, helped by mining stocks amid surging commodities prices.

    Over the past three months, Chinese shares have been battered by regulatory changes, turmoil in the property sector, and more recently a power crunch, but some investors are now starting to see a buying opportunity.

    “The debate on China is shifting a bit away from being very negative. People are asking ‘Is there a way beyond the regulatory uncertainty? How much of this is reflected in prices?’,” said Herald van der Linde, Asia Pacific head of equity strategy at HSBC.

    “We’re neutral, we tell people not to be too negative because valuations are low.”

    The focus remains on the property market as investors wait to see whether regulators take action to contain the contagion from cash-strapped China Evergrande Group’s debt problems.

    U.S. futures rose 0.16% after the U.S. Senate approved legislation to temporarily raise the federal government’s $28.4 trillion debt limit and avoid the risk of a historic default later this month.

    Overnight, on Wall Street, the Dow Jones Industrial Average  gained 0.98%, the S&P 500  rose 0.83% and the Nasdaq Composite  moved up 1.05%.

    Investors are also keeping an eye on U.S. employment data for September due later on Friday. They expect employment figures that are near consensus will lead the Federal Reserve to indicate at its November meeting when it will begin tapering its massive stimulus program.

    U.S. Treasury yields rose ahead of those figures, with volatility at the shortest end of the curve easing as the plan to avoid a default on government debt emerged.

    In Asian hours, the benchmark 10-year U.S. Treasury yield rose 1.6 basis points to 1.58887%, its highest since June when it touched 1.594%.

    In currency markets, the dollar index, which measures the greenback against a basket of its peers, was little changed at 94.206, not too far from a 12-month high of 94.504 hit in late September, as traders awaited the jobs data.

    CBA analysts said it was possible the jobs data could surprise investors by being lower than expected, but “we think it would take a larger miss than we are anticipating to stop the [Federal Reserve] from announcing a taper in November.”

    “A strong payrolls print can support USD because it will signal an imminent … taper.”       Source: Reuters

  • Asia stocks hold at highs, sustained by bottomless stimulus

    Asia stocks hold at highs, sustained by bottomless stimulus

    Asian shares rested at record highs on Thursday as investors digested recent meaty gains, while bulls were sustained by the promise of endless free money after a benign reading on US inflation and a dovish Federal Reserve outlook. Adding to the torpor was a lack of liquidity as markets in China, Japan, South Korea and Taiwan were all on holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1%, having already climbed for four sessions to be up over 10% so far this year. Japan’s Nikkei was shut after ending at a 30-year peak on Wednesday, while Australia’s main index held near an 11-month top. With China off, there was little reaction to news the Biden administration will look at adding “new targeted restrictions” on certain sensitive technology exports to the Asian giant and would maintain tariffs for now. Futures for the S&P 500 and NASDAQ were both steady, having hit historic highs on Wednesday. EUROSTOXX 50 futures and FTSE futures barely budged. Still, the outlook for more global stimulus got a major boost overnight from a surprisingly soft reading on core US inflation, which eased to 1.4% in January. Federal Reserve Chair Jerome Powell said he wanted to see inflation reach 2% or more before even thinking of tapering the bank’s super-easy policies. Notably, Powell emphasised that once pandemic effects were stripped out, unemployment was nearer 10% than the reported 6.3% and thus a long way from full employment. As a result, Powell called for a “society-wide commitment” to reducing unemployment, which analysts saw as strong support for President Joe Biden $1.9 trillion stimulus package. Indeed, Westpac economist Elliot Clarke estimated over $5 trillion in cumulative stimulus, worth 23% of GDP, would be required to repair the damage done by the pandemic. “Historical experience provides strong justification to only act against undesired inflationary pressures once they have been seen, after full employment has been achieved,” he said. “To that end, financial conditions are expected to remain highly supportive of the US economy and global financial markets in 2021, and likely through 2022.” The mix of bottomless Fed funds and a tame inflation report was a salve for bond market pains, leaving 10-year yields at 1.12% from a 1.20% high early in the week.That in turn weighed on the US dollar, which slipped to 90.395 on a basket of currencies and away from a 10-week top of 91.600 touched late last week.

    The dollar eased to 104.57 yen, from a recent peak of 105.76, while the euro rallied to $1.2122 from its low of $1.1950.

    In commodity markets, gold was sidelined at $1,838 an ounce as investors drove platinum to a six-year peak on bets of more demand from the automobile sector.

    Oil prices took a breather, having enjoyed the longest winning streak in two years amid producer supply cuts and hopes vaccine rollouts will drive a recovery in demand.

    “The current price levels are healthier than the actual market and entirely reliant on supply cuts, as demand still needs to recover,” cautioned Bjornar Tonhaugen of Rystad Energy.

    Brent crude futures eased back 40 cents to $61.07, while US crude dipped 36 cents to $58.32 a barrel.