Stock Rally Extends in Asia as U.S. Hits New Highs: Markets Wrap

Sep 21, 2017 5:37 pm ET

(Bloomberg) -- Equities in Asia extended gains seen around the world and Treasuries held on to declines on bets economic growth is strong enough to withstand heightened geopolitical tensions.

Benchmarks advanced in Tokyo and Sydney after the S&P 500 Index, the Dow Jones Industrial Average and the Nasdaq Composite Index all closed at fresh record highs on Tuesday. The dollar held onto gains ahead of U.S. inflation data later this week that could impact the timing of the next Federal Reserve interest-rate hike. Oil rose as OPEC and its allies are discussing an extension of output curbs

Record stock prices are provoking concern in some corners of the market with a surge in the number of investors seeking protection from a possible plunge and Leon Cooperman, the billionaire founder of hedge fund Omega Advisors, saying a correction could start “very soon.” A batch of China’s official economic indicators, due Thursday, is expected to signal improving consumption and factory output along with some softening in investment.

“There’s still optimism about the global economy,” Bob Sinche, global strategist at Amherst Pierpoint Securities LLC, told Bloomberg TV in New York. “Markets are still coming to grips with how strong that coordinated global expansion has become and that’s filtering through to earnings and to the stability of growth going forward.”

North Korea said it will accelerate its plans to acquire a nuclear weapon that can strike the U.S. homeland, in its first response to fresh United Nations sanctions. Earlier, Treasury Secretary Steven Mnuchin warned the U.S. may impose additional sanctions on China -- potentially cutting off access to the U.S. financial system -- if it doesn’t follow through on the new UN restrictions against North Korea.

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Among the key events this week for markets:

  • U.S. retail sales and inflation data are due.
  • The U.K. reports wage data Wednesday. The Bank of England will almost certainly leave policy unchanged Thursday.
  • Also due this week are the data on China’s August industrial production, retail sales and fixed-asset investment.
  • Australia releases jobs data on Thursday.

Here are the main moves in markets:

Stocks

  • The Topix index rose 0.5 percent of 9:16 a.m. Tokyo time. Australia’s S&P/ASX 200 Index added 0.4 percent and the Kospi index in Seoul was little changed. 
  • Futures on Hong Kong’s Hang Seng Index rose 0.1 percent.
  • Contracts on the S&P 500 were little changed after the underlying gauge climbed 0.3 percent on Tuesday in New York. Apple Inc. slipped, as did some of its biggest suppliers, after investors were underwhelmed at the unveiling of the company’s latest gadgets.
  • The MSCI All-Country World Index gained 0.3 percent to the highest on record.

Currencies

  • The Bloomberg Dollar Spot Index was steady.
  • The yen traded at 110.18 after sliding 0.7 percent on Tuesday.
  • The euro traded at $1.1969.
  • The Australian dollar was at 80.16 U.S. cents.

Bonds

  • The yield on 10-year Treasuries held at 2.17 percent, the highest in two weeks, after increasing four basis points on Tuesday.
  • Australian 10-year bond yields rose about four basis points to 2.68 percent.

Commodities

  • West Texas Intermediate crude rose 0.1 percent to $48.29 a barrel, up for a third day. The Organization of Petroleum Exporting Countries OPEC and its allies are discussing extending by more than three months the oil production cuts that expire in March 2018.
  • Gold was at $1,331.13 an ounce.

©2017 Bloomberg L.P.