Kuwait Times - - BUSINESS -

Trader Pe­ter Tuch­man (cen­ter) wears a ‘Dow 22,000’ hat as he works on the floor of the New York Stock Ex­change yes­ter­day. A big gain from Ap­ple yes­ter­day morn­ing sent the Dow Jones in­dus­trial av­er­age above 22,000 for the first time.

Asian tech­nol­ogy stocks hit 17-year peaks and Wall Street’s Dow in­dex broke 22,000 points yes­ter­day as block­buster earn­ings from Ap­ple rip­pled out to com­po­nent mak­ers glob­ally. Shares in the world’s most valu­able com­pany surged 6 per­cent af­ter-hours to a record of more than $159 each, tak­ing its mar­ket cap­i­tal­iza­tion above $830 bil­lion.

The Dow blue-chip in­dex rose above the key 22,000 level for the first time af­ter Ap­ple re­ported bet­ter rev­enues and prof­its for the past quar­ter. “US stocks are higher in early action, with the tech sec­tor get­ting a boost from the bet­terthan-ex­pected earn­ings re­sults from Dow mem­ber Ap­ple,” said an­a­lysts at the Charles Sch­wab bro­ker­age. It helped dis­pel one of the few nag­ging doubts of the cor­po­rate earn­ings sea­son so far-that Ama­zon’s lack­lus­tre re­sults last week might have re­vealed some tired­ness among the gi­ant US tech and in­ter­net stocks that have been driv­ing the stock mar­ket rally all year. “It is all about Ap­ple,” said Naeem As­lam chief mar­ket an­a­lyst at Think Mar­kets. “The firm com­fort­ably topped its fore­cast and pro­duced stel­lar num­bers for its rev­enue and profit.”

Among Asia’s Ap­ple sup­pli­ers, LG Innnotek jumped 10 per­cent and SK Hynix, the world’s sec­ond-big­gest mem­ory chip maker, rose 3.8 per­cent. Mu­rata Man­u­fac­tur­ing firmed 4.9 per­cent and Taiyo Yu­den 4.4 per­cent, help­ing Tokyo’s Nikkei up 0.47 per­cent. The MSCI tech in­dex for Asia also climbed 0.9 per­cent to ground not trod since early 2000, bring­ing its gains for the year to a heady 40 per­cent. Those gains bal­anced losses in ba­sic ma­te­ri­als and en­ergy to leave MSCI’s broad­est in­dex of Asi­aPa­cific shares out­side Ja­pan steady near its high­est since late 2007.

There was a note of cau­tion over re­ports that US Pres­i­dent Don­ald Trump was close to a de­ci­sion on how to re­spond to what he con­sid­ers China’s un­fair trade prac­tices.

Tepid US in­fla­tion along with po­lit­i­cal tur­moil in Wash­ing­ton has less­ened the pos­si­bil­ity of an­other Fed­eral Re­serve rate hike this year, low­er­ing bond yields across the globe. Im­prov­ing data in other ma­jor economies has also served to push the green­back down nearly 11 per­cent from Jan­uary peaks, ben­e­fit­ing com­modi­ties and emerg­ing mar­kets.

A swathe of man­u­fac­tur­ing sur­veys (PMIs) out on Tues­day had un­der­lined how the im­prove­ment in ac­tiv­ity had broad­ened out from the United States to Asia and Europe.


Alan Ruskin, head of G10 forex at Deutsche Bank, noted the top five PMIs were all North­ern Euro­pean economies and every in­dex in Europe was now in ex­pan­sion­ary ter­ri­tory above 50. “That will do noth­ing to hurt ebul­lient global risk ap­petite,” said Ruskin. “This phase of the risk rally is based on growth data, but even more on sub­dued in­fla­tion mea­sures.”

MSCI’s gauge of stocks across the globe was just be­low an all-time peak. On Wall Street later elec­tric car maker Tesla, gadget firm Fitbit and in­sur­ance provider AIG will re­port re­sults.

In cur­rency mar­kets, the dol­lar in­dex was stuck at just un­der 93, af­ter touch­ing 92.777, the low­est since early May 2016. It was aided by gains on a softer yen which saw it creep to 110.80.

Yet the euro also ben­e­fited from buy­ing against the yen, reach­ing its high­est since Fe­bru­ary last year. It nudged up against the dol­lar and Swiss Franc too, briefly strik­ing new 2-1/2-year highs against both at $1.1846 and 1.1468 francs per euro re­spec­tively. Euro zone June pro­ducer price in­fla­tion data helped it on its way as it topped an­a­lysts’ fore­casts.

There was a slow­down in the pace over­all, but it bol­stered bets that the Euro­pean Cen­tral Bank could soon start wind­ing down its more than 2-tril­lion-euro stim­u­lus pro­gram. “The ECB is go­ing to be the cen­tral bank to watch for the rest of the year,” said JP Mor­gan As­set Man­age­ment global mar­ket strate­gist Alex Dry­den.

“We think they are go­ing to take 9-12 months to get out of the mar­ket but that is a big ques­tion ... it could even be six months,” he added.

Bond mar­kets were largely quiet, with the pre­mi­ums in­vestors de­mand to hold South Euro­pean gov­ern­ment debt over the Ger­man equiv­a­lent close to their low­est lev­els in weeks and both 2- and 10-year US Trea­sury yields barely budged.

In emerg­ing mar­kets, MSCI’s EM stocks in­dex was near a three-year high. In­dia’s cen­tral bank be­came the first in Asia to cut in­ter­est rates this year, while Venezuela’s bonds con­tin­ued to slid amid ris­ing po­lit­i­cal ten­sions there around Pres­i­dent Ni­co­las Maduro.

Oil prices were un­der pres­sure again too amid ris­ing US fuel in­ven­to­ries and as ma­jor world pro­duc­ers kept pumping, caus­ing in­vestors to worry that sev­eral weeks of steady gains had pushed the rally too far. Brent crude eased to $51.80 a bar­rel, while US crude lost 8 cents to $49.07.


SEOUL: A cur­rency trader ges­tures at the for­eign ex­change deal­ing room of the KEB Hana Bank head­quar­ters in Seoul yes­ter­day.—

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