Global Stocks Rise Broadly as Hang Seng Eyes a Record -- Update
January 15 2018 - 11:02PM
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 ended morning trading up 1.3% at 31751.60,
rebounding from a Monday afternoon selloff that ended the index's
record 14-day winning streak.
Fueling Monday's pullback was strong afternoon selling in
mainland Chinese stocks, especially in Shenzhen. The ChiNext Price
Index, which tracks new-economy stocks there, fell 3% Monday, the
most since November. It ended Tuesday morning trading up 0.1%,
while the Shanghai Composite--which saw its record 11 straight days
of gains end Monday--rose 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 impacted 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
noted. "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, added Mr. Hao.
Japanese stocks also rebounded Tuesday as the yen pulled back
some. With the dollar climbing to Yen110.90 from Yen110.50 earlier,
the Nikkei was recently up 0.6%.
Currency concerns had also been weighing on New Zealand
equities, helping cause a four-day losing streak. But the NZX 50
closed up 0.5%. The index rose each month of 2017.
But Australia's S&P/ASX 200 shed 0.2% as the country's large
miners cooled and the utilities sector extended declines, falling
more than 1% to its lowest level since October.
Rio Tinto, which had surged 19% in five weeks, was recently down
0.5% 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, dropped 0.6% Tuesday.
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, meanwhile, were recently up 0.2%.
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 0.3% at $70.06 a barrel.
Meanwhile, bitcoin slid in Asian trading ahead of the expiration
of Cboe futures Wednesday, the first since trading started last
month. Prices are around $12,900, according to CoinDesk, versus
$14,300 midday Monday in the U.S. The CoinDesk Price Index was last
down 3.5% after hitting an intraday low of $12,763.
(END) Dow Jones Newswires
January 15, 2018 23:47 ET (04:47 GMT)
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