MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 percent in early trade.
Japan’s Nikkei .N225 jumped 1.1 percent, its biggest one-day gain in more than two weeks, while Australian stocks advanced 0.9 percent.
South Korean stocks .KS11 climbed 0.4 percent after data showed the domestic economy grew at a slightly faster pace than initially thought in the fourth quarter of 2016, supported by strong construction activity.
Overnight, the S&P 500 .SPX and the Dow Jones Industrial Average closed lower but had narrowed their losses from earlier in the session, when both hit near-six-week lows. The Nasdaq .IXIC ended higher.
Risk appetite had evaporated after Trump’s failure to garner enough support last week to pass a bill repealing the Affordable Care Act, former President Barack Obama’s signature health care bill, even with a Republican-controlled Congress.
That blow for Trump spooked global risk assets on concerns about the president’s ability to enact stimulus policies. The MSCI World index, which had stumbled last week, managed to recover, as confidence returned that the Trump administration will corral Congressional support for other pro-growth policies.
“Markets appear reluctant to take the Trump disappointment too much further at this stage,” Ric Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note.
“With U.S. economic growth showing signs of improvement and the (Federal Reserve) clearly embarked on a monetary tightening cycle, the significant correction that has already occurred in bonds and the U.S. dollar may already reflect an adequate wind-back of the market’s Trump exuberance.”
The U.S. 10-year bond yield, which hit a one-month low yesterday, recovered to trade higher at 2.3782 today.
The dollar added 0.1 percent to 110.75 yen JPY=D4 after touching its lowest level since November yesterday.
The dollar index inched up to 99.233 after slumping to a 4-1/2-month low yesterday.
The euro EUR=EBS was steady at $1.08655 today, after touching its highest level since November yesterday.
In commodities, the return of risk appetite helped lift oil from a level close to the 3-1/2-month low seen last week, despite lingering concerns about whether producers will extend an OPEC-led output cut beyond the end of June to ease a global glut.
U.S. crude gained 0.5 percent to $47.96 a barrel, after dropping as much as 1.9 percent yesterday.
Gold was little changed at 1,253.06 early today, after pulling back from the one-month-high hit earlier yesterday. – Reuters