Asia stocks reach 10-year peak on global equity surge, dollar sags

Friday, 13 October 2017 00:00 - - {{hitsCtrl.values.hits}}

Tokyo (Reuters): Asian stocks reached a 10-year high on Thursday, riding the bull run in global equity markets, while the dollar sagged after the Federal Reserve showed a more guarded view towards inflation.

Spreadbetters expected a mixed start for European stocks, forecasting Britain’s FTSE to open down 0.05%, Germany’s DAX to start 0.03% higher France’s CAC to open flat.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.55% and at its highest since December 2007.

Japan’s Nikkei was up 0.4% after brushing 20,994.40, its highest since November 1996. South Korea’s KOSPI added 0.55% to mark a fresh record peak and Hong Kong’s Hang Seng scaled a decade-high.

Asia took cues from Wall Street, where major indexes rose to yet another set of record closing highs overnight following a report that a market-friendly candidate was being pushed as successor to Janet Yellen at the helm of the Fed.

Broader investor risk sentiment has improved this week after Catalonia dialled back plans to break away from Spain, with MSCI’s 47-country world stocks index reaching a record high.

Global equities now appear to be taking geopolitical developments such as the secessionist push in Spain and tensions on the Korean peninsula in their stride, to reach those record tops.

The dollar index against a basket of six major currencies slipped to a two-week low of 92.821 following the release of the minutes from the Fed’s last policy meeting on Sept. 19-20.

Fed policymakers had a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if it did not, the minutes showed.

While this did little to cool expectations for the Fed to raise interest rates in December, it did make the central bank appear slightly less hawkish than it seemed right after the September policy meeting when it signalled the year-end monetary tightening. The dollar was particularly weak against the euro as relief over Catalonia stopping short of a formal declaration of independence supported the common currency.

The euro rose to $1.1879, its highest since Sept. 25 and on track for a fifth straight day of gains.

The dollar was little changed at 112.360 yen, having bounced back from a two-week trough below 112.000 plumbed earlier this week.

The U.S. currency was seen to have found support after a media survey showed that Japanese Prime Minister Shinzo Abe’s ruling party could come close to keeping its two-thirds “super” majority in an Oct. 22 lower house election.

Spot gold edged up to a 15-day high of $1,295.45 an ounce, supported by a weaker dollar.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.