REUTERS-Asian stocks
climbed for an eighth consecutive day on Thursday, buoyed by further gains on
Wall Street and an overnight bounce in oil prices that bolstered
energy and
resource shares.
Also
underpinning the cautious streak of optimism has been a steady stream of upbeat
factory and service sector surveys out of the U.S., Europe and Asia this week,
prompting some banks to raise their global growth forecasts for 2017.
European
stocks are set to take their cues from a firm Asia with index futures pointing
to modest gains.
MSCI's
broadest index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS rose more
than 1 percent, extending a rally that has seen it gain 2 percent in the
opening days of 2017.
India .NSE and
Hong Kong .HSI led gains, while Japan's Nikkei .N225 slipped 0.3 percent as the
yen edged up on the dollar. Philippine shares .PSI rose to their highest levels
in nearly two months and Singapore .STI shares rose 1.3 percent.
"Recent
economic data is pretty good so markets are in risk-on mode overall and the
dollar is supported. But U.S. bond yields are being capped so the dollar is
losing the driver behind its rally," said Yukio Ishizuki, currency
strategist at Daiwa Securities.
U.S. shares
ended higher on Wednesday even after minutes from the Federal Reserve's
December meeting showed concerns that quicker economic growth under the Trump
Administration could require faster interest rate increases to ward off inflation.
[.N]
The FOMC
minutes noted upside risk to growth forecasts and uncertainty over the level of
fiscal stimulus, while some members warned that the tighter labor market could
signal a more aggressive path of rate increases.
Still, with
just over two weeks before U.S. President-elect Donald Trump takes office, Fed
officials and global investors are also waiting for evidence that his campaign
promises will be approved by Republican lawmakers and kick the U.S. economy
into higher gear.
"The
December minutes reinforce our view that the FOMC remains on a cautious and
gradual rate hike trajectory amid an uncertain fiscal and economic
outlook," OCBC said in a note.
Despite the
extended bounce in Asian stocks, valuations remain at moderate levels,
suggesting more institutional inflows if market conditions remain benign.
Valuations for
Asian stocks are near 10-year averages in terms of price-to-book and a
price-to-earnings multiples, according to Reuters data.
Growth in
China's services sector accelerated to a 17-month high in December, a private
survey showed, adding to views that the world's second-largest is entering the
new year with stronger momentum.
The strong
pick-up mirrored improvements in manufacturing surveys earlier this week, as
market watchers debate whether China's leaders will settle for a more modest
growth target this year in order to focus on more pressing issues such as an
explosive growth in debt.
In currencies,
the dollar briefly stumbled after policymakers noted extended gains in the
greenback would weigh on inflation, though it managed to pare losses by the end
of a choppy U.S. session.
The dollar was
trading around 116.3 handle against the Japanese yen JPY=while
China's offshore yuan CNH=D3 strengthened
against the dollar after posting its biggest daily gain against the dollar in a
year.
China stepped
into both its onshore and offshore yuan markets to shore up the faltering yuan
for a second day on Wednesday, sparking speculation that it wants a firm grip
on the currency ahead of Trump's inauguration on Jan. 20. [CNY/]
U.S.
Treasuries consolidated recent gains after the Fed minutes with two-year bond
yields US2YT=RR edging lower to 1.22 percent.
After rising
nearly 2 percent overnight, oil prices dipped in Asian trade on doubts that
producers would fully deliver on promises to cut output, although record U.S.
automobile sales and falling crude stockpiles offered markets some support.
U.S. West
Texas Intermediate (WTI) crude oil futures CLc1 were flat at $53.25 per barrel
and Brent crude futures LCOc1, the international benchmark for oil prices, were
trading at $56.39 per barrel. [O/R]
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