Asian stocks climb on growth hopes, US dollar up
Tuesday, 5 January 2010
HONG KONG, Jan 4 (Reuters): Financial markets were upbeat on the first trading day of 2010 Monday, with Asian stocks hitting a 17-month high and the US dollar up against major currencies on hopes US job figures this week will reflect a sustained economic recovery.
Major European stock markets were expected to open mixed, with Britain's FTSE 100 seen down 0.4 per cent while Germany's DAX was seen up 0.1 per cent, according to financial bookmakers. US stock futures rose 0.4 per cent.
Emerging Asian currencies strengthened on expectations for a broader recovery in exports as key Western markets improve, but the trend is posing challenges to regional policymakers struggling to maintain stable currencies.
"Throughout the last months of last year we highlighted the expectation of Asian currency outperformance and for that to show up best against G3 excluding the US dollar," said Patrick Bennett, Asia foreign exchange and rates strategist with Societe Generale in Hong Kong, in a note.
"That theme is still very much in play and we look for further outperformance in coming weeks and months," he said.
Investors focused on bullish indicators, such as figures Monday showing manufacturing employment in South Korea at the highest since January 2008, and ignored the few bearish ones, like a much larger-than-expected fourth-quarter contraction of Singapore's economy.
The main event of the week will be the US payrolls numbers on Friday. The median expectation is for a decline of 20,000 jobs in December, though economists at banks like BNP Paribas, Barclays Capital and Nomura expect to see the first jobs growth in two years.
Japan's Nikkei share average rose 1 per cent to its highest close since Oct 3, 2008, led by companies in the technology sector.
Shares of Japan Airlines Corp soared 31 per cent and were the top gainer in the Nikkei after local media reported a state-owned bank would double its credit line to the struggling airline.
The MSCI index of Asia Pacific stocks outside Japan was up 0.3 per cent by midafternoon at its highest level since July 2008. Technology stocks again outperformed, building on solid gains last year, while financials lagged.
Major European stock markets were expected to open mixed, with Britain's FTSE 100 seen down 0.4 per cent while Germany's DAX was seen up 0.1 per cent, according to financial bookmakers. US stock futures rose 0.4 per cent.
Emerging Asian currencies strengthened on expectations for a broader recovery in exports as key Western markets improve, but the trend is posing challenges to regional policymakers struggling to maintain stable currencies.
"Throughout the last months of last year we highlighted the expectation of Asian currency outperformance and for that to show up best against G3 excluding the US dollar," said Patrick Bennett, Asia foreign exchange and rates strategist with Societe Generale in Hong Kong, in a note.
"That theme is still very much in play and we look for further outperformance in coming weeks and months," he said.
Investors focused on bullish indicators, such as figures Monday showing manufacturing employment in South Korea at the highest since January 2008, and ignored the few bearish ones, like a much larger-than-expected fourth-quarter contraction of Singapore's economy.
The main event of the week will be the US payrolls numbers on Friday. The median expectation is for a decline of 20,000 jobs in December, though economists at banks like BNP Paribas, Barclays Capital and Nomura expect to see the first jobs growth in two years.
Japan's Nikkei share average rose 1 per cent to its highest close since Oct 3, 2008, led by companies in the technology sector.
Shares of Japan Airlines Corp soared 31 per cent and were the top gainer in the Nikkei after local media reported a state-owned bank would double its credit line to the struggling airline.
The MSCI index of Asia Pacific stocks outside Japan was up 0.3 per cent by midafternoon at its highest level since July 2008. Technology stocks again outperformed, building on solid gains last year, while financials lagged.