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Asian shares gain as earnings, tax debate help US stocks

Pedestrians walk past an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo

Syndicated News
Written by Syndicated News

TOKYO, Nov 17, 2017 : Asian shares rose today as strong U.S. earnings and a step forward in the U.S. Congress on tax reform brightened the mood, even though investors noted that many more hurdles must be passed to reach a final deal on tax cuts.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent while Japan’s Nikkei .N225 gained 0.9 percent, extending its recovery from a near three-week intraday low hit the previous day.

Wall Street’s main indexes rose sharply on Thursday, boosted by strong gains in Wal-Mart (WMT.N) and Cisco (CSCO.O) following their earnings.

The S&P 500 .SPX advanced 0.82 percent to turn positive for the week, a day after hitting a three-week low, while the Nasdaq Composite .IXICadded 1.3 percent to a closing record high of 6,793.29.

MSCI’s broadest gauge of the world’s stock markets stemmed its five-day losing streak and posted its biggest daily gain in two months, of 0.80 percent, yesterday.

“The markets had been wary of fall in credit products during the last few days but it seems we just had a healthy correction. As the European Central Bank and the Bank of Japan are still pumping liquidity, the world’s asset markets will be supported,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

The U.S. House of Representatives approved a broad package of tax cuts sought by President Donald Trump, passing its first, if smallest, hurdle and providing a catalyst for fresh buying in risk assets.

The tax debate now moves to the U.S. Senate, where that chamber’s separate plan has already encountered resistance from some Republicans. No decisive Senate action is expected until after next week’s Thanksgiving holiday on next Thursday.

The positive mood on Wall Street helped to lift the yield on two-year U.S. notes to a nine-year high, with a Fed rate hike in December seen almost as a done deal.

Fed funds rates futures are now pricing in about a 90 percent chance of another rate hike by June next year, the highest level in recent months and up from about 50 percent just over a month ago.

As the dollar gained, the euro EUR= edged down to $1.1769, slipping further from its one-month peak of $1.1862 touched on Wednesday.

The dollar ticked up to 113.09 yen JPY=, extending its rebound from Wednesday’s 112.47, its lowest level in almost a month.

Elsewhere bitcoin hit a record high BTC=BTSP, quickly recovering from its 30-percent plunge last week.

Oil prices have slipped from two-year highs hit last week on signs that U.S. supply is rising and could potentially undermine OPEC’s efforts to tighten the market.

U.S. light crude stood at $55.22 a barrel, little changed from its levels in the past couple of days but down 2.7 percent on the week. – Reuters

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Syndicated News

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