Tokyo and Seoul lead Asia rally after Wall Street gains

 01 Nov 2017 - 11:07

Tokyo and Seoul lead Asia rally after Wall Street gains


Hong Kong: Tokyo and Seoul led a rally in Asian shares Wednesday, on the back of strong earnings reports across the region including tech giants Sony and Samsung.

The buying, after a muted start to the week in Asia, tracked overnight gains on Wall Street that saw the Nasdaq close at a fresh record. 

Along with solid US economic data and growing expectation that a centrist, continuity candidate will take over at the US Federal Reserve, the outlook for global growth remained broadly positive.

Asia has witnessed an impressive profit reporting season so far, with Sony the latest electronics blue-chip company to announce it was expecting record annual profits.

Sony stocks surged 11.4 percent, with strong results attributed to its PlayStation games division and a booming smartphone parts business, as well as a hit with the newest Spider-Man movie.

Honda also revved up its annual profit outlook on motorcycle purchases, while a fall in Nissan passenger car sales after an inspection scandal appeared to have already been priced in by investors.

Tokyo finished at a fresh 21-year high, trading up 1.9 percent, as firms benefited from a weak yen making their products more competitive in foreign markets and inflating repatriated profits.

The announcement from Japan's central bank Tuesday that it would keep its ultra-loose monetary policy unchanged, even though overseas counterparts have started turning off the stimulus taps, also contributed.

Seoul shrugged off data showing October exports rising by less than expected, with shares up 1.3 percent, led by Samsung. The flagship tech firm logged a record profit of $10.0 billion for the third quarter.

Hong Kong was trading up 0.9 percent, with the latest evidence of the city's equity rally coming from internet giant Tencent's e-book arm. The country's answer to Amazon's Kindle Store, China Literature has reportedly raised US$1.1 billion for a Hong Kong listing next week.

Shanghai had edged up 0.1 percent, as new numbers showed Chinese factory activity stabilised in October, going some way to dispel the gloom of yesterday's official reading which suggested output growth had slowed.

Sydney also finished up, gaining 0.5 percent after a strong showing from miners and healthcare stocks. 

- US Federal Reserve meets -

Wall Street rose as data releases showed US consumer confidence hit a 17-year high in October, while congressional Republicans prepare to unveil President Donald Trump's long-anticipated tax cut plan.

The result of the ongoing US Federal Reserve meeting is due after Asian markets close Wednesday. 

Investors will scrutinise the announcement for indications of a widely anticipated December hike.

Overshadowing the whole process is Trump's imminent decision on whether to replace Fed chief Janet Yellen, with the announcement likely to come Thursday ahead of his departure on an 11-day Asia tour.

Centrist Jerome Powell is tipped to be the frontrunner, with investors pricing in his potential appointment over the more hawkish John Taylor.

Traders are also keeping a close eye on key payroll data out on Friday.

The New York attack by a truck driver that killed eight people, and Trump's vow to ensure more robust "extreme vetting" of travellers to the US did not appear to have affected investor sentiment.

Oil prices rose to a two-year high, as OPEC members honoured pledges to curb supply and exports from northern Iraq fell.