Stocks in Asia climbed and S&P futures pointed higher after data fueled confidence in the US economy, and as equity traders in Tokyo returned from holidays with the yen in a four-day slump.
Japanese equities were set for the biggest gain in two months with the Topix index climbing more than 2 percent on its first trading day of 2017. Chinese shares climbed for a third day, while Australian, Indian and South Korean shares edged higher and Hong Kong equities declined. The S&P 500 Index posted its biggest climb in four weeks and the dollar extended gains as US manufacturing grew. Oil recouped some of Tuesday’s slump ahead of stockpile data.
A global equity rally has extended into the new year as data from the US, China and Europe boosted optimism for growth. Traders look to be shrugging off doom-sayers such as former Treasury Secretary Lawrence Summers, who warned that President-elect Donald Trump’s policies might have unintended consequences for the world’s largest economy, and analysts at Eurasia Group who said that America’s 45th president could contribute to a level of global instability not seen since World War II.
“Markets have been rallying quite strongly on this notion of fiscal hope but, as we move into the reality of 2017 and what a Trump presidency will actually look like, there is some risk of fiscal disappointment,” Paul Eitelman, a Seattle-based strategist at Russell Investments Ltd., which oversees about $244 billion, told Bloomberg Radio’s Asia Daybreak program. “Any disappointment at this point could be a source of downside risk for markets from here, so we’re incrementally being a bit more cautious.”
The MSCI Asia Pacific Index was up 1 percent as of 3.07 p.m. Tokyo time. The Shanghai Composite Index rose 0.7 percent and was at the highest in three weeks. The Hang Seng Index fell 0.1 percent and India’s S&P BSE Sensex added 0.1 percent. New Zealand’s S&P/NZX 50 Index rose 1.4 percent, while Australia’s S&P/ASX 200 Index was up 0.1 percent. S&P 500 Index futures rose 0.1 percent after the underlying index Tuesday added 0.9 percent to 2,257.83. The index advanced 9.5 percent in 2016. Japan’s Topix index and Nikkei 225 Stock Average both gained at least 2.4 percent, the best first day of trading since 2013. The Topix lost 1.9 percent in 2016, its first annual loss in five years.
The US Dollar Index was up 0.1 percent, near its highest level since December 2002. The yen traded at 118.16 per dollar, down 0.3 percent. The offshore yuan strengthened 0.2 percent to 6.9432 per dollar and the onshore yuan rose 0.1 percent to 6.9554. South Korea’s won slid 0.3 percent. The Aussie gained 0.2 percent to 72.38 U.S. cents, while the kiwi fell 0.1 percent.
Crude oil rose 0.8 percent following its 2.6 percent slide to close at $52.33 a barrel in New York after touching the highest level since July 6, 2015, at more than $55. Futures rose 45 percent last year. Gold was up 0.2 percent after jumping 1 percent in New York Tuesday.
