Asian markets push rally into second day

MOST Asian markets yesterday built on the previous day’s rally after a broadly positive lead from Europe and Wall Street, while traders look ahead to the start of US earnings.

Dealers remain upbeat after Friday’s surprisingly strong US jobs data that analysts said has put the Federal Reserve on course for at least one more interest rate hike this year, boosting the dollar.

Eyes will now turn to Fed boss Janet Yellen’s congressional testimony this week for a better handle on the bank’s plans for rates, as well as winding down its other stimulus put in place during the financial crisis.

However, the key catalysts for business this week will be the beginning of the corporate report season, with big-name firms, including JP Morgan, PepsiCo and Citigroup, in line.

“Looking ahead, we think improving corporate earnings are the key ingredient needed to sustain the equity bull market,” senior portfolio manager and chief equity strategist at Nuveen Asset Management LLC Bob Doll said.

“And with economic growth prospects looking solid, we think earnings can climb,” he told Bloomberg News.

On Asian equity markets, Tokyo ended 0.6% higher while Hong Kong surged 1.5% and Sydney put on 0.1%. Seoul added 0.6%, with Taipei more than 1% up and Wellington 0.6% higher. However, Shanghai eased 0.3% and Singapore gave up 0.6%.

Bets that US borrowing costs will rise further continue to underpin the dollar, which held gains against the pound and euro. However, while it pushed up against the yen, it has struggled to break out, despite the widening gap between US and Japanese monetary policy.

Senior trader at Oanda Stephen Innes said ongoing geopolitical fears following North Korea’s missile test last week and questions about Japanese Prime Minister Shinzo Abe’s future after recent scandals and an election setback “are weighing on Japanese investors as a drive for downside protection enters the psyche”. — AFP