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Asian Markets Rise After U.S. Debt Ceiling Deal

Asian-Markets2_06Sep17.jpg

Asian stock markets are mostly higher on Thursday following the overnight gains on Wall Street after U.S. President Donald Trump agreed to support a short-term measure that would raise the debt ceiling and fund the government for three months.

Nevertheless, investors are cautious as they await the European Central Bank's monetary policy announcement later in the day. The ECB is widely expected to leave interest rates unchanged and maintain its asset purchase program.

The Australian market is rebounding following the positive lead from Wall Street and higher crude oil prices.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 21.00 points or 0.37 percent to 5,710.70, off a high of 5,718.10 earlier. The broader All Ordinaries Index is up 20.80 points or 0.36 percent to 5,773.70.

In the mining space, BHP Billiton is declining more than 1 percent after it turned ex-dividend, while Rio Tinto is rising more than 1 percent and Fortescue Metals is adding almost 1 percent.

Oil stocks are higher after crude oil prices extended gains overnight. Woodside Petroleum is adding 0.4 percent, Santos is up 0.5 percent and Oil Search is advancing more than 1 percent.

In the banking sector, Westpac, Commonwealth Bank and National Australia Bank are advancing in a range of 0.5 percent to 0.8 percent, while ANZ Banking is losing 0.2 percent.

Meanwhile, gold miners are weak after gold prices dipped overnight as risk aversion eased. Newcrest Mining is declining almost 1 percent and Evolution Mining is down 0.6 percent.

Sigma Healthcare reported a 17.4 percent increase in its half-year net profit despite lower sales and said that the outlook for fiscal 2019 is more positive. Shares of the pharmacies and drug supplier are rising almost 3 percent.

In economic news, the latest survey from the Australian Industry Group showed that the construction sector in Australia continued to expand in August, although at a slower pace, with a Performance of Construction Index score of 55.3. That's down from 60.5 in July, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.

The Australian Bureau of Statistics said that Australia had a seasonally adjusted merchandise trade surplus of A$460 million in July. That missed forecasts for a surplus of A$1.000 billion following the upwardly revised A$888 million surplus in June.

The Australian Bureau of Statistics also said that the total value of retail sales in Australia came in roughly unchanged in July on a seasonally adjusted basis, standing at A$26.113 billion. That was shy of expectations for an increase of 0.2 percent following the downwardly revised 0.2 percent gain in June.

In the currency market, the Australian dollar has breached the US$0.80 mark. In early trades Thursday, the local unit was trading at US$0.8001, up from US$0.7981 on Wednesday.

The Japanese market is rising as the positive cues from Wall Street and a weaker safe-haven yen bolstered investor sentiment.

In late-morning trades, the benchmark Nikkei 225 Index is adding 96.63 points or 0.50 percent to 19,454.60, off a high of 19,482.72 earlier.

Among the major exporters, Mitsubishi Electric and Panasonic are advancing almost 2 percent each, while Canon is edging up less than 0.1 percent. Sony is losing 0.5 percent.

Among automakers, Toyota and Honda are adding more than 1 percent each. In the banking sector, Mitsubishi UFJ Financial is up 0.4 percent, while Sumitomo Mitsui Financial is down 0.3 percent.

In the oil space, Inpex is adding more than 1 percent and Japan Petroleum Exploration is up 0.5 percent after crude oil prices rose 1 percent overnight.

Among the other major gainers, Tokuyama Corp. and Suzuki Motor are rising almost 4 percent each. Hitachi Construction Machinery is advancing almost 3 percent.
On the flip side, Kyowa Hakko Kirin is losing almost 2 percent and FamilyMart UNY Holdings is down more than 1 percent.

In economic news, Japan will see preliminary July numbers for its leading and coincident indexes today.

In the currency market, the U.S. dollar is trading in the lower 109 yen-range on Thursday.

Elsewhere in Asia, South Korea, Singapore, New Zealand, Hong Kong, Malaysia, and Taiwan are also higher. Shanghai and Indonesia are modestly lower.

On Wall Street, stocks rebounded on Wednesday following news President Donald Trump agreed to support a measure that would raise the debt ceiling and fund the government for three months. The short-term debt limit and government funding measure would be attached to a bill providing aid for victims of Hurricane Harvey.

The Dow climbed 54.33 points or 0.3 percent to 21,807.64, the Nasdaq rose by 17.74 points or 0.3 percent to 6,393.31 and the S&P 500 advanced 7.69 points or 0.3 percent to 2,465.54.

The major European markets turned in another mixed performance on Wednesday. The U.K.'s FTSE 100 Index dipped by 0.3 percent, while the French CAC 40 Index rose by 0.3 percent and the German DAX Index advanced by 0.8 percent.

Crude oil prices rose Wednesday amid expectations for demand for crude oil from refineries in Texas as they get back to normal operations after Hurricane Harvey. WTI crude for October delivery climbed $0.50 or 1 percent to $49.16 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

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