Markets make gains in Asia
Source: Agencies |
February 8, 2011, Tuesday
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Print Edition
Print Edition
Asian stocks pushed toward a near three-year peak yesterday as the American job market showed -further signs of recovery, highlighting a brighter economic outlook, while the dollar eased against a basket of currencies.
South Korea and Japan led gains, with the former ending up below a record high and the latter closing at a nine-month peak.
Japan, which is the best performing Asian market this year with year-to-date gains of more than 3 percent, has benefited from a shift into developed markets and generally strong corporate earnings. The index closed up 0.5 percent.
South Korea has seen inflows from investors rotating out of last year's hot performing emerging markets in South and Southeast Asia due to relatively attractive valuations.
The broader MSCI index of Asian stocks outside Japan was up 0.4 percent to within striking distance of a three-year peak tested in January.
So far this year, Asian stocks have underperformed the MSCI world index by nearly 3 percentage points due to a variety of factors such as frothy valuations in some markets in South and Southeast Asia and strong data out of the United States.
Investors pulled out US$7 billion from emerging markets equity funds in the week of February 4, their biggest outflow in three years, data from fund tracker EPFR Global showed, putting a sizeable dent in record inflows seen in this category in 2010.
But indications that Asian authorities are demonstrating greater urgency to tackle inflation, with Indonesia being the latest country to increase interest rates by a quarter point last week, have made investors optimistic about the near-term outlook.
"Policy-makers are likely to adopt more administrative measures and front-load rate hikes as inflationary expectations continue to rise," Barclays Capital strategists said.
Most Asian markets which were closed for the Lunar New Year holiday late last week reopened yesterday with the exception of China, where trading will not resume until tomorrow.
Boosted by Friday's data, which showed a sharp drop in the -American unemployment rate, the dollar gained briefly against a basket of -currencies. The -dollar index, which tracks the greenback against a basket of major currencies, had dipped 0.2 -percent by midday, -nearing a three-month low of 76.881 tested last Wednesday.
The euro was up 0.2 percent at US$1.3617 with traders citing talk of euro-buying by Asian names.
Reports of eurozone infighting over a French and German push for a comprehensive package of reforms to address the region's debt crisis also kept a lid on the euro.
South Korea and Japan led gains, with the former ending up below a record high and the latter closing at a nine-month peak.
Japan, which is the best performing Asian market this year with year-to-date gains of more than 3 percent, has benefited from a shift into developed markets and generally strong corporate earnings. The index closed up 0.5 percent.
South Korea has seen inflows from investors rotating out of last year's hot performing emerging markets in South and Southeast Asia due to relatively attractive valuations.
The broader MSCI index of Asian stocks outside Japan was up 0.4 percent to within striking distance of a three-year peak tested in January.
So far this year, Asian stocks have underperformed the MSCI world index by nearly 3 percentage points due to a variety of factors such as frothy valuations in some markets in South and Southeast Asia and strong data out of the United States.
Investors pulled out US$7 billion from emerging markets equity funds in the week of February 4, their biggest outflow in three years, data from fund tracker EPFR Global showed, putting a sizeable dent in record inflows seen in this category in 2010.
But indications that Asian authorities are demonstrating greater urgency to tackle inflation, with Indonesia being the latest country to increase interest rates by a quarter point last week, have made investors optimistic about the near-term outlook.
"Policy-makers are likely to adopt more administrative measures and front-load rate hikes as inflationary expectations continue to rise," Barclays Capital strategists said.
Most Asian markets which were closed for the Lunar New Year holiday late last week reopened yesterday with the exception of China, where trading will not resume until tomorrow.
Boosted by Friday's data, which showed a sharp drop in the -American unemployment rate, the dollar gained briefly against a basket of -currencies. The -dollar index, which tracks the greenback against a basket of major currencies, had dipped 0.2 -percent by midday, -nearing a three-month low of 76.881 tested last Wednesday.
The euro was up 0.2 percent at US$1.3617 with traders citing talk of euro-buying by Asian names.
Reports of eurozone infighting over a French and German push for a comprehensive package of reforms to address the region's debt crisis also kept a lid on the euro.
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