ASIA MARKETS: Asian Markets Off To The Races, Hoping Trump Will Reveal Stimulus Details
By Willa Plank
Japanese companies look to gain from investments in U.S.; commodities drive Australian market
Asian stock markets broadly rose Wednesday on encouraging economic data and an impending press conference by U.S. President-elect Donald Trump, which traders hoped may contain details of his stimulus program.
"Can we get a little plan for fiscal stimulus?" said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets. "What will be coming for tax cuts? The composition, the time and potentially the size of his planned fiscal spending. That will have an impact on what the [U.S. Federal Reserve] is going to do."
The press conference is scheduled for later in the global trading day. Read: What time is Donald Trump's press conference on Wednesday? (http://www.marketwatch.com/story/what-time-is-donald-trumps-press-conference-on-wednesday-2017-01-11)
Japan's Nikkei closed up 0.3%, Korea's Kospi rose 1.5%, Australia's S&P/ASX 200 gained 0.2% and Hong Kong's Hang Seng Index ended up 0.8%.
Data arrived Tuesday that small-business optimism in the U.S. hit its best level since 2004 (http://www.marketwatch.com/story/small-business-sentiment-soars-to-12-year-high-on-post-election-euphoria-2017-01-10).
Elsewhere, Australian job vacancies rose 2.2% sequentially to 182,000 in the quarter through November, according to government data released Wednesday. The growth "certainly bodes well for hiring in coming months," says CommSec senior economist Savanth Sebastian. "Overall, it is pretty clear that the job market remains in good shape."
"Inflation is coming back globally," added Moltke-Leth, saying this indicated demand was returning to world economies.
Japan's automobile, technology and chemical companies stand to gain should Mr. Trump indicate during his press conference that he wants more foreign companies to invest in the U.S., said Hisao Matsuura, chief strategist at Nomura Japan. This would flag a shift in posture, away from protectionist measures and toward a pro-investment stance that may be good for Japan Inc.
"Instead of raising tariffs or being a protectionist, they think Trump will ask other countries to invest more in the U.S.," said Matsuura. This could lead to a stronger dollar "but Trump will welcome that."
"At this point of the economic cycle with the economy accelerating and the Fed on a hiking process, it is really hard for the U.S. to keep a weaker dollar," added Matsuura. A stronger dollar implies a weaker yen, which makes Japan's exporters more competitive.
In Japan, Toshiba (6502.TO) climbed 4.3% on media reports that its main lenders have agreed to maintain their financial support even though the firm is preparing a gigantic write-down of its U.S. nuclear operations.
Commodities stocks were leading the Australian market, said Michael McCarthy, chief market strategist at CMC Markets. Stocks globally were gaining on an improved global outlook, he said. BHP Billiton (BHP.AU) was up 2.6%, Fortescue Metals (FMG.AU) was higher by 4.5% and Rio Tinto (RIO) jumped 3.9%.
The rise in Chinese producer prices bodes well for Australia. China is Australia's biggest export market and a major consumer of its iron ore, coal and other goods.
Amid broad gains in the region, Chinese stock fell notably amid some apparent profit-taking. Start-of-year gains continued to dissipate as the Shanghai Composite Index fell 0.8%. Shenzhen's main index fell 1% and the tech-heavy ChiNext slid 0.7% to 1,937.55.
Looking ahead, traders await the arrival of earnings season in the U.S, which kicks off Friday. Any increase in capital expenditure "tells you that they are seeing final demand and it's worth investing in the business again," said Andrew Sullivan, managing director of sales trading at Haitong International Securities.
(END) Dow Jones Newswires
January 11, 2017 05:38 ET (10:38 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.