Asia stocks rise, euro steady as relief from French vote buoys sentiment

• Asia ex-Japan, Nikkei post gains as market euphoria persists
• Canadian dollar falls after US announces lumber duties
• Euro holds most gains after Macron victory in French vote
• Oil up but limited by worries OPEC won’t extend production curbs

 Singapore (Reuters): Asian equities advanced on Tuesday as the return of risk appetite following a centrist victory in the first round of the French presidential election lifted several regional markets to multi-year highs, while the euro retained most of its overnight gains.

Safe-haven assets, including the yen and gold remained under pressure, while the Canadian dollar fell after the US announced new duties averaging 20% on Canadian softwood lumber imports. The Canadian currency tumbled to a four-month low as the U.S. dollar strengthened 0.4% to C$ 1.3554. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.35% to its highest level in more than three weeks, marking four straight days of gains.

“Asian markets appear to be still lingering in the glow of relief after the French election,” said Jingyi Pan, market strategist at IG in Singapore. “The jubilance in markets overnight has also added to the optimism.”

US President Donald Trump’s promise of an announcement on a tax reform plan on Wednesday would offer further impetus to markets, she added.

Japan’s Nikkei added 0.8%. South Korea’s KOSPI advanced 0.4% to the highest level since April 2015 after SK Hynix, the second-largest company on the index, reported a record first-quarter profit.

Chinese shares rose 0.1%, while Hong Kong’s Hang Seng gained 0.9%. The CSI300 posted its worst day in 2017 on Monday amid signs Beijing will tolerate further market volatility as regulators clamp down on shadow banking and speculative trading.

Indonesian stocks opened at an all-time high, and Malaysian stocks hit their highest level since May 2015.

Australia and New Zealand are closed for the Anzac Day holiday.

Polls show Emmanuel Macron defeating anti-euro nationalist Marine Le Pen by as much as 30 percentage points in the second round of the French presidential election in two weeks.

Overnight, the MSCI World index surged 1.6% to an all-time high. The pan-European STOXX 50 index soared 4%, its best day in nearly two years and France’s CAC40 jumped 4.1%, its biggest one-day gain in almost five years.

On Wall Street, the Nasdaq climbed 1.2% to a record high, while the Dow and the S&P both gained 1.1%.

The euro was at $ 1.08585 on Tuesday, slightly lower than Monday’s close. It retained most of Monday’s 1.3% gain, which was its strongest one-day performance in 10-1/2 months, and lifted the common currency to a 5 1/2-month high.

The euro’s earlier gains had weighed on the dollar index, which touched a four-week low overnight. The index, which tracks the greenback against a basket of trade-weighted peers, was marginally higher at 99.18, failing to make up most of Monday’s 0.9% loss.

The dollar advanced 0.4% to 110.085 yen on Tuesday, extending Monday’s 0.6% jump as investors sold off the safe-haven yen.

A strong earnings season in the US has also lifted investors’ spirits, with 77% of the 100 companies that have reported first-quarter results so far beating profit expectations.

This week is set to be the busiest in at least a decade, with over 190 S&P 500 companies reporting first-quarter results, including heavy weights Alphabet and Microsoft.

This week in Asia, investors await a raft of economic indicators, including first-quarter inflation data for Australia and Japan, the Bank of Japan’s interest rate decision, Japan’s March unemployment rate and first-quarter gross domestic product for Taiwan and South Korea.

In commodities markets, oil prices crept higher after six straight sessions of losses, although gains were capped by fears that the Organization of Petroleum Exporting Countries may not extend output cuts beyond 30 June, and as Russia indicated it can lift output if the deal on curbs lapses.

US crude added 0.5% to $ 49.49 a barrel, but hovered close to the lowest level in almost four weeks hit on Monday. Global benchmark Brent climbed 0.6% to $51.90 after also hitting a four-week low overnight.

Gold inched lower, remaining near a two-week low touched overnight. It was trading 0.1% lower at $ 1,273.91 an ounce.