Asian Stocks Extends Gains Ahead of ECB, BOJ Policy ReviewsBy
U.S. Dollar selloff sees reprieve as yields rise, Euro falls
Aussie stocks up as ARPA expects tier-1 capital ratio increase
Asian equities rose to the highest level in almost 10 years as the euro weakened and U.S. dollar remained near its one-year low on hopes the European Central Bank and Bank of Japan will keep policies supportive amid concerns over the pace of reforms in the U.S..
The MSCI Asia Pacific Index rose for an eighth straight day, adding 0.3 percent to 158.64 as of 4:32 p.m. in Hong Kong. Financial and technology shares were the top gainers.
“The inability for the Republican party to legislate is putting downward pressure on the USD,” said James Soutter, a fund manager at K2 Asset Management in Melbourne. “Lower USD tends to be positive for Asian-linked currency economies. Until we get any reform or repeal of Obamacare, the U.S. will not put through changes to taxation policy.”
Four out of five top contributors to index move were Australian bank stocks, which rebounded after a two-day slump, after new capital requirements turned out to be less onerous than expected. Chinese shares also rose amid broad based rally led by gains in energy and financial shares.
European Central Bank and Bank of Japan are expected to keep their monetary policies unchanged at their respective meetings on Thursday. The market-implied probability of a Federal Reserve rate hike by year-end has declined to about 40 percent from 60 percent on July 7, based on the current effective fed funds rate.
- Topix index +0.1%, Nikkei 225 Index +0.1%
- Hang Seng Index +0.6%, Hang Seng China Enterprises Index +1%, Shanghai Composite Index +1.4%, Taiex +0.2%
- Australia’s S&P/ASX 200 Index +0.8, New Zealand’s NZX 50 +0.3%
- Australia’s Big Banks Rally on ‘Benign’ New Capital Rules
- Kospi Index +0.2%, Kospi 200 Index -0.2%
- South Korea Stewardship Code May Boost Stock Valuations: Citi
- Straits Times Index +0.5%, FTSE Bursa Malaysia KLCI Index +0.1%, Philippine Stock Exchange PSEi Index +0.3%, Jakarta Composite Index -0.3%
- Sensex Index +0.3%, Nifty 50 Index +0.5%