Asian tech stocks hit 17-year highs

Emerging market stocks flirted with near three-year highs yesterday but Venezuelan bonds sold off further as polling data cast doubt on a weekend election and opposition leaders were jailed, raising the risk of fresh United States sanctions.

MSCI’s benchmark emerging markets stocks index rose 0.2 per cent to just below a near three-year high hit at end-July, helped by Asian tech stocks hitting 17-year peaks. Stellar earnings from Apple lifted component makers globally after shares in the world’s most valuable company surged to a record of more than US$159.

In South Korea, Apple suppliers LG Innnotek jumped 10 per cent and SK Hynix, the world’s second-biggest memory chip maker, rose 3.8 per cent, helping the index gain 0.2 per cent. Hong Kong shares also rose 0.2 per cent and index heavyweight Taiwan gained 0.8 per cent.

Emerging Europe also opened stronger with the Turkish market up 0.4 per cent, Poland up 0.3 per cent to 2-1/2-month highs and Hungary stocks up 0.5 per cent.

William Jackson, a senior emerging markets economist at Capital Economics, said the broader market was supported by a recent run of relatively strong growth data and positive global risk sentiment, with developed markets pulling emerging markets higher.

But Chinese mainland shares slipped 0.2 per cent after US president Donald Trump was said to be close to a decision on how to respond to what he considers China’s unfair trade practices.

In debt markets, Venezuelan state oil firm PDVSA bonds fell to 16-month lows, with the 2037 bond dipping below 30 cents in the dollar.

Venezuelan sovereign bonds also sold off across the curve as investors eyed the ongoing crisis triggered by a controversial legislative body, which has prompted the US sanctions.

Emerging currencies were mainly weaker, with the Russian rouble down 0.4 per cent against the dollar, and at its lowest against the euro since November. The rouble has been hit by lower oil prices and concerns about US sanctions.

But the Indian rupee bucked the trend, firming 0.5 per cent to a two-year high after a central bank rate cut that was widely expected as inflation has slumped.