Asian markets mostly up at start of week but Hong Kong struggles

 08 Jan 2018 - 9:33

Asian markets mostly up at start of week but Hong Kong struggles


Hong Kong: Most Asian markets rose on Monday following yet more records on Wall Street but Hong Kong turned lower after nine days of gains.

Traders in New York pushed all three main indexes ever higher on Friday, unperturbed by a well-below-forecast jobs reading with analysts saying the results indicated the employment market was tightening.

With the corporate earnings season about to kick off, global equities continue to see in the new year on a positive note, with optimism boosted by a strong US economy.

Greg McKenna, chief market strategist at AxiTrader, said: "There is a growing feeling that US stocks have entered the final stage of this great bull market. That's certainly a view that seems to be starting to gain traction.

"But even as traders and investors worry we are in the 'frothy' stage of the rally there is still some reluctance to call a top. That makes sense given the strength of the US and global economy and the impetus from the tax cuts."

However, he warned: "But sometime in the next few months, all the good news will be priced in."

In early trade, Hong Kong was down 0.2 percent after a run of nine straight gains that have put the Hang Seng Index at its highest level since late 2007.

Shanghai rose 0.1 percent, Sydney added 0.2 percent and Singapore was 0.4 percent higher while Seoul put on 0.3 percent.

Taipei and Manila were also higher but Wellington dipped. Tokyo was closed for a public holiday.

Investors were given a strong lead from their US counterparts, who looked past news that 148,000 new jobs were created in December, well off the 190,000 expected.

However, Chris Conway, chief market and trading specialist at Australian Stock Report, said it was "still a fairly solid number that fits with the tight labour market theme".

Commentators pointed out that while the reading was below-par, wages rose and a tighter jobs market could in turn lead to further increases in pay and higher inflation, which would then push the Federal Reserve to hike interest rates.

The dollar managed to hold up against its peers after recent losses, with Stephen Innes, head of Asia-Pacific trading at OANDA, saying the greenback could be in line for a rebound.

He also highlighted the release by the Fed of minutes from policy meetings it held in 2012 that were attended by its next boss Jerome Powell, which showed his hawkish credentials, providing support to the dollar.