Translate

Search This Blog

Search Tool




Asian Markets at Close Report

European Markets at Close Report

Jan 4, 2017

Asian Markets at Close Report on January 4, 2017: Nikkei Soars to Start New Year With a 13-Month High

marketwatch.com

Kenan Machado


Japan equities kicked off the new year sharply higher on Wednesday, amid a robust outlook for the U.S. economy and a positive signal for Japanese manufacturing, as well as expectations of continued yen weakness.

The Nikkei Stock Average NIK, +2.51%   ended up 2.5% at a 13-month closing high, helped by gains in financial and export-oriented stocks, as trading resumed after a four-day holiday weekend. It was the first time since 2013 that the index closed up on the first trading day of the year.
The Nikkei Japan Manufacturing Purchasing Managers’ Index, a key measure of manufacturing activity, rose to 52.4 in December from 51.3 in November, the highest reading since December 2015. A reading above 50 indicates expansion.
Among key outperforming shares, Shinsei Bank 8303, +4.08%   ended up 4.1%, while Mitsubishi UFJ 8306, +3.47%   gained 3.5%. Honda Motor 7267, +4.57%   gained 4.6%, and Mitsubishi Motors 7211, +4.35%  rose 4.4%.
Japanese air-bag maker Takata 7312, +17.50%  surged to its daily limit for a third-straight session, and was last up 18% on the possibility that it was nearing a settlement with U.S. prosecutors to resolve allegations of criminal wrongdoing. Hopes for an early settlement have sent the stock up 66% since last Wednesday’s close to reach a 14-month high today.
Japan’s gains lifted other Asian markets as well, with Singapore’s Straits Times Index STI, +0.77%   up 1.1%, and the FTSE Bursa Malaysia Index FBMKLCI, +0.73%   adding 0.5%. Australia’s S&P/ASX 200 XJO, +0.06%   closed up 0.1%.
“Today was the first day of trade in Japan and market participants are reacting to the good news over the global economy,” said analyst Masashi Murata, who covers regional and emerging markets for Brown Brothers Harriman.
The outlook for the global economy is strong with inflation picking up in the U.S. and Europe, he said.
Chinese families sending younger kids overseas to U.S. schools
Ken Yan, age 11, left his home in Jiangxi province, China, to start a new life with a host family in Orange County, Calif. Journal
On Tuesday, the U.S. dollar DXY, -0.22%  rose to a 14-year high, boosted by positive data on factory activity. The Institute for Supply Management’s manufacturing index, released Tuesday, rose to its highest level in two years. The news pushed the WSJ Dollar Index BUXX, -0.31%  up 0.3% to its highest level since mid-2002.
In Asian trade Wednesday, the index was last down 0.1% at 93.52. Still, the dollar USDJPY, -0.20%  strengthened 0.2% against the yen to reach ¥117.99. A weaker yen makes Japanese exports more competitive.
The U.S. dollar has been gaining strength on expectations that the U.S. Federal Reserve will raise interest rates further to counter inflation. The concerns over inflation come as President-elect Donald Trump is widely expected to unveil a fiscal stimulus package to boost the economy.
“Trade is very much focused on the dollar versus the yen and the euro,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “If the dollar is stronger then there is very much a risk on trade.”
Despite a stronger dollar, which makes contracts priced in the currency more expensive, commodities stocks rallied. Australia’s Fortescue Metals FMG, +1.68%   gained 1.7%, and BHP Billiton BHP, +0.59%   rose 0.6%.
Crude oil also recovered, with prices for Brent crude LCOH7, +0.59%  , the international oil benchmark, rising 0.2% to $55.59 a barrel early Wednesday, recovering from Tuesday’s declines.
Japan Petroleum Exploration 1662, +2.81%   gained 2.8% and with oil firm Inpex 1605, +1.62%   added 1.6%. Hong Kong-listed shares of China Shenhua 1088, +3.28%   added 3.3%, while KunLun Energy 0135, +0.86%   gained 1.4%.
In China, the Shanghai Composite SHCOMP, +0.73%   closed up 0.7% at 3,158.79, its highest level since Dec. 9, ahead of the release of the China Services Purchasing Managers’ Index on Thursday. On Tuesday, a private gauge of manufacturing came in at the strongest level since early 2013.
In Shenzhen, the main board 399106, +1.15%  gained 1.2%, and the startup heavy ChiNext board 399006, +1.44%  rallied 1.4%, its biggest single-day gain in percentage terms in nearly three months.
Despite across the board buying in blue-chip stocks, Hong Kong’s Hang Seng Index HSI, -0.07%  was down 0.1% in the morning session on Wednesday.