Asia buoyant after Dow closes above 20,000

January 26, 2017

by: Peter Wells in Hong Kong

Thursday 02.15 GMT

Overview

Market spirits are buoyant in Asia after the Dow Jones Industrial Average rose above 20,000 points for the first time.

Hot topic

The Dow Jones on Wednesday traded and closed above 20,000 points for the first time. A generally supportive earnings season has allowed Wall Street to continue its “Trump trade”, which began in November when Donald Trump won the US presidential election.

Also closing at record highs were the S&P 500, up 0.8 per cent, and the technology-focused Nasdaq Composite. Small-cap stocks, measured by the Russell 2000, retreated, however. It was in late November that all four US equities gauges simultaneously closed at record highs for the first time since 1999.

Equities

Japanese and Hong Kong stocks are performing strongly, with the Topix and Hang Seng benchmarks in both locations up 1.3 per cent and 1.2 per cent, respectively.

China’s Shanghai Composite was up 0.2 per cent and the tech-focused Shenzhen Composite gained 0.4 per cent.

The Australian market was shut for a public holiday.

Forex

For all the excitement in US stocks, the greenback is having none of it. The US dollar index, a measure of the currency against a basket of global peers, was down 0.2 per cent at 99.877. The index most recently closed below 100 points on November 11.

The Japanese yen was 0.1 per cent weaker at ¥113.41 per dollar, giving back about a quarter of Wednesday’s gain.

The Mexican peso was 0.2 per cent stronger at 21.0326 per dollar. The currency weakened during Asian trade on Wednesday after US President Donald Trump reiterated via Twitter his intention to build “the wall” between the US and Mexico.

But the currency reversed course and closed the session 2.1 per cent stronger after the Trump administration disclosed details of executive orders aimed at curbing illegal immigration and construction of the border wall.

Commodities

Oil prices were firmer, with Brent crude, the global benchmark, and West Texas Intermediate both up 0.9 per cent, at $55.59 a barrel and $53.24 respectively.

Gold was down 0.2 per cent at $1,198.71 an ounce.

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