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With Wall Street finishing Friday on a high despite mixed feelings resulting from the highly anticipated U.S. jobs report, Asian indices moved higher in unison on Monday, with the exception of the Nikkei 225 which was not trading due to a national holiday in Japan. While the number of new jobs created in December came in lower than forecast, there was some compensation in the form of November’s figure being revised upwards and higher average hourly earnings for December. However, it seems that markets are currently determined to take a glass half full attitude to any mixed news and the Nasdaq and S&P both finished the week at new highs, with the Dow Jones only slightly off the landmark 20,000 level and also recording a gain.
However, further strengthening of the USD will be making Asian equity markets nervous of the potential for sustained capital outflows, especially Hong Kong, where the currency is pegged to the dollar. Domestic business, especially exporters and retailers, would be expected to suffer. Hong Kong residents spend more money retail money abroad when the currency strengthens and exporters become less competitive. Asian markets are likely to show a degree of caution this week with attention turned to a Trump news conference on Wednesday when the president-elect is expected to give insight into his policy stance on global trade and China in particular.
For now, the Hang Seng is continuing its positive beginning to 2017, recording a Monday gain of 0.25%. The day’s two strongest performers were both Macau casino stocks with Galaxy Entertainment up 4.26% and Sands China 2.67%. Energy and property investment stocks also performed well. PetroChina finished Monday with a positive return of 2.32%, Power Assets Holdings +1.45%, Hong Kong and China Gas +1.3% and Kunlun Energy +0.84% all made the day’s leaderboard. In real estate, China Overseas Land and Investment was up 1.41% and Sino Land 1.34%. Life insurance group AIA was up 1.23% and Bank of China Hong Kong by 1.06%.
In Australia, the ASX 200 finished the session with a strong 0.9% gain to kick off the week, moving past the 5800 points level. Having recorded gains every session since the New Year break the ASX is now 2.4% up for 2017 to-date. The financial sector led gains today with ANZ up 1.24%, National Australia 1.7%, Westpac 1.49% and Commonwealth Bank 1.34%. However, the big commodities and mining companies were a drag on the index after a negative market outlook for iron ore was predicted by Australia’s Department of Industry, Innovation and Science. A lift in Chinese steel production isn’t expected to last and the department sees a significant decline from current levels in iron ore prices over the next 2 years.
BHP Billiton finished Monday down 0.12%, Rio Tinto 1.3% and Fortescue Metals a whopping 3.79%, the index’s biggest faller on Monday. Gaming and lotteries company Tatts Group lost 2.6% and Reliance Worldwide, which makes plumbing fittings and water control valves, was down 2.48%.
The day’s biggest gainer on the ASX was graphite miner Syrah Resources, up 6.71%. Lithium company Galaxy Resources rose by 6.25% and hearing aid implants company Cochlear added 4.51%.
In Singapore, the STI recorded a 0.64% gain. Macau casino play Genting Singapore was the biggest gainer, mirroring results on the Hang Seng, up 2.7%. SembCorp Marine and SEMBCorp Industries both performed well, up 2.01% and 2.33% respectively while Golden-Agri resources, the palm oil company, gained 2.38%. Yangzijiang Shipbuilding was the other company with a rise of more than 2%, up 2.41%.
There weren’t many losers on the index today with only 5 companies in the red. Thai Beverage, which has been on the slide since the middle of last week, lost 0.59% while the biggest faller proved to be land transport logistics company ComfortDelGro, which lost 0.78%.
