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Asia shares track Wall Street rise, wary on North Korea

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Written by Syndicated News

SYDNEY, Nov 29 2017 : Asian shares rose and the dollar held firm today after Wall Street shot to record peaks amid signs of progress on U.S. tax cuts, upbeat economic data and bank-friendly comments from the would-be head of the Federal Reserve.

There was no obvious market reaction to the latest missile test by North Korea. President Donald Trump said the United States “will take care of” the North Korea issue and the approach to dealing with Pyongyang would not change.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent in early trade. Japan’s Nikkei .N225 added 0.5 percent, while Australia’s main index rose 0.7 percent.

The prospects for a U.S. tax cut seemed to improve after Senate Republicans rammed forward their bill in a partisan committee vote that set up a full vote by the Senate as soon as tomorrow, although details of the measure remained unsettled.

Republican leaders conceded that they have yet to round up the votes needed for passage in the Senate, where they hold a narrow 52-48 majority.

Some analysts, however, did warn of the risks of unintended consequences if the package was passed.

“Tax cuts will mainly boost the demand side of the economy at a time when the economy has little spare capacity,” said Jeremy Lawson, chief economist at Standard Life Investments.

Fed chair nominee Jerome Powell, in his Senate confirmation hearing on Tuesday, said the case for a December rate hike was coming together, though he dodged comment on the tax proposals.

Powell also hinted at a lighter touch for bank regulation, saying current rules were already tough enough.

The S&P financial sector .SPSY soared 2.6 percent in reaction, its biggest daily gain since March 1.

That helped the Dow .DJI climb 1.09 percent, while the S&P 500 .SPX rose 0.99 percent and the Nasdaq .IXIC or 0.49 percent.

Adding to the good cheer was data showing U.S. consumer confidence surged to a near 17-year high in November, while home prices rose sharply in September, which should underpin consumer spending.

All of which helped the dollar regain some ground. Against a basket of currencies it was steady at 93.200 and off a two-month trough of 92.496 touched on Monday.

The dollar likewise edged up to 111.57 yen JPY= and away from a 10-week low of 110.85, while the euro backed off to $1.1846 EUR=.

Sterling had been the major mover, rallying on media reports Britain and the EU have reached agreement on a Brexit divorce bill that might herald a breakthrough in the talks.

The pound was last changing hands at $1.3363 GBP=, having jumped from as low as $1.3222 yesterday.

In commodity markets, palladium hit its highest since February 2001 as traders expecting higher demand from the automotive industry piled into the metal. Spot gold was little changed at $1,293.81 an ounce

Oil eased amid uncertainty over the outcome of OPEC talks about extending price-supporting output cuts, combined with a surprise rise in crude inventories.

U.S. crude eased 27 cents to $57.73 in early trade, while Brent crude oil held at $63.61 a barrel. – Reuters

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Syndicated News

Syndicated News

News sourced from Bernama, Reuters, AFP and other accredited news agencies, including credible blogsites and news portals.