Global Stocks Rise Broadly as Hang Seng Eyes a Record -- 2nd Update
January 16 2018 - 2:33AM
Dow Jones News
By Gregor Stuart Hunter
Asian equity markets found their footing after some initial
softness, as Hong Kong's benchmark attempts for a second day to set
a record closing high.
The Hang Seng Index was recently up 1.4% at 31770, rebounding
from a Monday afternoon selloff that ended the index's record
14-day winning streak. Strong afternoon selling in mainland Chinese
stocks, especially in Shenzhen, fueled Monday's pullback.
The ChiNext Price Index, which tracks new-economy stocks in
Shenzhen, fell 0.4% after the lunch break, extending its 3% decline
on Monday. But it didn't hurt the broader market, with the Shanghai
Composite Index--which saw its record 11 straight days of gains end
Monday--gaining 0.2%.
The rapid pace of rule changes by the China Securities
Regulatory Commission to rein in lending in the country's unruly
shadow banking sector has hurt investor confidence, said Hao Hong,
head of research and strategy at Bank of Communications.
"The CSRC has been coming out with new rules during the weekend
and sometimes during the week as well. This is quite unusual," he
said. "By tightening up peer-to-peer lending, internet financing
and all that, we're seeing reduced credit in the system."
The People's Bank of China has injected liquidity into the
financial system the past few days to keep markets steady after
several weeks on the sidelines, Mr. Hao said.
Japanese stocks also rebounded Tuesday as the yen pulled back.
With the dollar climbing to Yen110.90 from Yen110.50 earlier, the
Nikkei finished up 1% to log its latest 26-year closing high.
Taiwan logged another 28-year record and New Zealand's NZX 50,
which rose in each month of 2017, closed 0.5% higher on bargain
hunting, snapping a four-day losing streak fueled by currency
concerns.
But Australia's S&P/ASX 200 ignored regional gains, shedding
0.5% as the country's large miners cooled and the utilities sector
extended declines, falling 1.3% to its lowest level since
October.
Rio Tinto, which had surged 19% in five weeks, dropped 0.7%
after hitting a fresh 6 1/2 -year high in early trading on record
production figures for 2017. BHP Billiton, which had risen on
stronger commodities prices partly driven by the U.S. dollar's
recent weakness, closed 0.8% lower as iron-ore prices fell.
The U.S. dollar steadied in Asian trading after hitting a fresh
three-year low Monday, when U.S. markets were closed for a holiday.
S&P 500 futures were recently up 0.3%.
Despite selling in the dollar having stopped for now, the
currency "can't find a friend at the moment in the market," said
Chris Weston, chief market strategist at IG Markets. "There's a
wave of capital moving out of the U.S." amid factors including the
market pricing in a more-aggressive pace of interest-rate increases
in Europe than the U.S.
Michael J. Howell, managing director at CrossBorder Capital,
said "money that rushed into the U.S. mid-decade is set to get
pulled out, potentially sending the ICE Dollar Index down another
5% to 10% this year." The dollar was helped by "whopping flows of
'flight' capital" from 2014 to 2016, he added, "largely from China,
emerging markets and the eurozone."
Oil prices, hitting three-year highs of late in part on the
dollar's declines, pulled back in Asia. The global Brent benchmark
was recently down 0.4% at $69.99 a barrel.
Meanwhile, bitcoin slid in Asian trading ahead of the expiration
of Cboe futures Wednesday, the first since trading started last
month. Prices were around $13,100, according to CoinDesk, versus
$14,300 midday Monday in the U.S.
(END) Dow Jones Newswires
January 16, 2018 02:18 ET (07:18 GMT)
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