Asia shares start week higher after Wall Street rally
Tuesday, 18 February 2014 00:01
HONG KONG (AFP): Asian stock markets rose on Monday, taking their lead from strong gains on Wall Street despite weaker-than-expected Japanese growth figures.
Global markets rallied last week following a turbulent period, as investors were reassured that the US economy could handle the Federal Reserve’s decision to reduce its stimulus programme.
Tokyo stocks rose 0.40% on Monday morning after falling at the market open, Hong Kong jumped 0.79%, Sydney climbed 0.36%, and Seoul was up 0.33%. Shanghai was up 0.36% by mid-morning.
Gold touched fresh three-month highs Monday following a rally last week, while oil prices held above $100 a barrel in Asian trade following a surge in bank lending in China, the world’s top energy consumer.
Data released Monday showed Japan’s economy expanded 1.6% last year, in the first annual figures since Prime Minister Shinzo Abe launched a policy blitz dubbed Abenomics.
However, investors were disappointed by GDP growth of just 0.3% in the October-December quarter, and fretted that a looming sales tax hike in April could derail the budding recovery in the world’s third largest economy. “What’s worrisome is consumption. Even though some front-loaded demand ahead of the sales tax increases has started helping it, that hasn’t increased much,” Masamichi Adachi, a senior economist JPMorgan Securities, told Dow Jones Newswires. US stocks soared on Friday with the Dow Jones Industrial Average finishing up 360.31 (2.28%), its biggest weekly increase of 2014, at 16,154.39.
The broad-based S&P 500 rose 41.61 (2.32%) to 1,838.63, while the tech-rich Nasdaq vaulted 118.17 (2.86%) to 4,244.03. It was the second straight week of gains across the board.
The rally on Wall Street defied disappointing economic data showing US retail sales unexpectedly fell 0.4% in January, while industrial production also saw a surprise dip after a cold snap hampered factory activity in several regions.
In currency trades the dollar fetched 101.57 yen on Monday morning, down from 101.81 yen in New York Friday. The yen won support from expectations that the Bank of Japan will hold fire on new easing measures at a two-day policy meeting starting Monday.
The euro was mixed at 139.39 yen and $1.3720, from 139.42 yen and $1.3715 in US trade, after data Friday showed that a modest recovery in the eurozone economy remains on track.
Oil prices were mixed in Asian trade, after crude futures reached multi-month highs last week on improved demand prospects from China and the US.
New York’s main contract, West Texas Intermediate for March delivery, rose 21 cents to $100.51 in late morning trade. Europe’s benchmark contract Brent North Sea crude for April eased three cents to $109.05.
Gold was trading at $1,326.70 an ounce at 0310 GMT compared with $1,309.30 late Friday, when it rose above the $1,300 mark for the first time since November.