Asian traders take stock after fresh Wall Street record

HONG KONG: Asian markets paused for breath yesterday after Wall Street smashed through 22,000 for the first time, with regional traders focused on fresh clues on the health of the US economy.

Strong Apple earnings propelled the Dow above the barrier to mark its sixth straight record close – but the tech-heavy Nasdaq closed marginally lower.

Tokyo ended a two-day rally to sit 0.4 per cent lower by the break, with several tech companies falling following drops in US peers.

Profit-taking also hit many of Apple’s Japanese suppliers which rose the previous day on the US iPhone maker’s strong earnings.

Hong Kong shares ended a strong rally which saw prices record the biggest monthly advance in July since January, while Shanghai moved further off its 2017 high achieved Tuesday.

Analysts said despite the euphoria from the Dow’s fresh record, investors were still watching the US Federal Reserve’s plan to unload its balance sheet following its vast quantitative easing programme.

“Everyone is talking about the record close last night,” said Greg McKenna, chief market strategist AxiTrader.

“But despite that, we received some further guidance from a number of Fed speakers overnight about a solid agreement that the balance sheet reduction will happen soon.”

McKenna warned: “If the growth in the balance sheet had stimulatory effects on the economy – and clearly stocks – then why (wouldn’t) the reduction in balance sheet size ... act as a de facto tightening.” — AFP