Asian Stocks Extend Rally After Dow Tops 20,000: Markets Wrap 

• MSCI Asia Pacific Index trading at highest since July 2015
• Gold extends decline while bonds and dollar remain steady

A global equities rally gathered speed as Asian stocks climbed to the highest level since July 2015 after the Dow Jones Industrial Average topped 20,000 for the first time. Gold continued a selloff while bonds and the dollar were steady.

Stocks from Tokyo to Hong Kong jumped as U.S. corporate earnings reignited investor optimism in economic growth. Japan’s Topix capped the biggest two-day gain since November, as financial shares soared. The dollar was little changed after Wednesday’s declines, as was the yield on 10-year Treasury notes after topping 2.50 percent. Gold extended a two-day drop, and oil climbed back above $53 a barrel.

While corporate earnings bolster the bullish sentiment toward equities, investors are also encouraged by early indications of U.S. President Donald Trump’s policies. He has taken steps to fulfill pro-growth campaign promises, including identifying possible infrastructure projects, approving two oil pipelines and cajoling American carmakers into building plants in the U.S. The improved sentiment comes after traders this month began to seek haven assets amid concern that gains after Trump’s election had gone too far.

“The U.S. economy is doing well, corporate earnings are good and it looks like Mr. Trump’s policies will keep improving the economy,” said Mitsushige Akino, an executive officer at Ichiyoshi Investment Management Co. in Tokyo. “With bond yields increasing, we’re seeing gradual moves from bonds to risk assets.”

Australian and Indian markets are closed Thursday for holidays.

Here are the main moves in markets:

Stocks

• The MSCI Asia Pacific Index added 1.2 percent as of 2:55 p.m. in Tokyo, climbing for a second day and reaching the highest since July 2015.
• The Topix jumped 1.5 percent, with Mitsubishi UFJ Financial Group Inc. leading gains among financial stocks while SoftBank Group Corp. helped pull technology shares higher. The index is up 2.6 percent over two days.
• South Korea’s Kospi index rose 1 percent. Singapore’s Straits Times Index increased 0.5 percent and was poised for the highest close since October 2015. Thailand stocks rallied for a fifth straight day.
• Hong Kong’s Hang Seng Index jumped 1.3 percent to the highest in three months and the Shanghai Composite Index rose 0.2 percent. China’s central bank has ordered the nation’s lenders to strictly control new loans in the first quarter, people familiar with the matter said, in another move to curb excess leverage in the financial system.
• The Dow closed at 20,068.51. The rise from 19,000 was the second-fastest 1,000-point run in the measure’s history. It’s up 9.5 percent since Trump’s election. The S&P 500 Index jumped 0.8 percent to a record.

Bonds

• The yield on the 10-year Treasury added one basis point to 2.52 percent, the highest level of the year, after jumping five basis points on Wednesday.

Currencies

• The yen fell 0.1 percent to 113.40 per dollar, after climbing 0.5 percent Wednesday.
• The Bloomberg Dollar Spot Index was little changed after reaching the lowest level since November. The currency is poised for a fifth straight weekly decline, the longest stretch since May 2015.

Commodities

• Gold fell 0.2 percent to $1,198.17 an ounce, after dropping 1.4 percent over the previous two sessions as optimism around corporate earnings fueled risk appetite. The metal reached the highest in two months earlier in the week.
• West Texas Intermediate crude rose 0.8 percent to $53.19, erasing Wednesday’s declines as investors weighed output cuts from OPEC and other producing nations against expanding U.S. crude stockpiles.
• Iron ore continued its rally for a third day, with futures climbing 0.9 percent.

Source: Bloomberg

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