Hang Seng, Nikkei reach multi-year highs as Asian stocks rise
By Ese Erheriene
Hong Kong index is up 29% this year
Stock markets in Asia posted broad gains Friday morning as Hong Kong's benchmark index briefly reached its best level in a decade and Japan's Nikkei moved closer to levels last seen in 1996.
The latest leg higher for stock markets, including new records in the U.S., has been helped by fresh comments from central bankers interpreted in support of a December interest-rate increase. Fed-fund futures now show a 87% probability of an increase then, versus 78% on Tuesday, according to CME Group data.
The comments helped push the dollar higher on Thursday, giving a fresh lift to equities globally.
"It is difficult to say more about the raging optimism in U.S. equity markets," said Jingyi Pan, a market strategist at IG Group. That includes six consecutive record closing highs for the S&P 500, the longest such streak in 20 years, and Wall Street's fear gauge -- the CBOE Volatility Index, or VIX -- finishing at a record low Thursday.
For Asia, "mild gains remains in sight given the abundance of positive leads," said Pan.
Leading the way in Asia Pacific on Friday was Australia, which has been lagging both recent gains and the advances seen elsewhere for much of this year. The S&P/ASX 200 rose 0.7%, helped by overnight gains in commodity prices, a key segment for the country's economy. The index through Thursday had fallen for three straight sessions, putting it down 0.2% for the year.
Australian bank stocks rose, rising more than 1%. Meanwhile, Japan's Topix bank subindex was up 1.3%. The U.S. rate outlook is important for Asian financial companies as their margins have been under pressure in the current low-rate environment.
Meanwhile, Hong Kong's Hang Seng Index has been the star this year with a 29% jump. It rose a further 0.5% just after the open following a holiday on Thursday, resulting in the index finally, albeit briefly, topping 2015's high and putting it at levels not seen since 2007's record highs.
Japan's Nikkei Stock Average rose 0.2% to set another 26-month high, helped by the dollar rising to Yen112.80 from an overnight low of around Yen112.40. Stock indexes in New Zealand and the Philippines (PSE.PH) were on pace for more record closing highs Friday.
The stock buying has come as trading volume across asset classes remains muted with markets in China and South Korea still closed for public holidays on Friday and as some investors await the U.S. jobs report. But that release will be affected by recent hurricanes, so some investors will discount the report's readings for September.
Commodity prices were down slightly in Asia amid the dollar's fresh gains. That included oil edging 0.1% lower after rising some 2% overnight, reversing some of its recent pullback.
-Ese Erheriene ; 415-439-6400; AskNewswires@dowjones.com
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10-05-17 2338ETCopyright (c) 2017 Dow Jones & Company, Inc.