Asia shares extend bull run, dollar crawls off lows


29 January, 2018 09:29 AM

Asia shares extend bull run, dollar crawls off lows

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Asian shares extended their bull run on Monday amid upbeat corporate earnings and strong global economic growth, while the dollar tried to bounce even as the White House continued to complain of “unfair” trade practices by competitors.


MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4 percent, aiming for a 12th straight session of gains. It is up 8 percent for the year so far.

Japan’s Nikkei rose 0.5 percent as the yen eased a little, while South Korea notched a record.

Hong Kong’s Hang Seng also rose 0.5 percent. It has been the best performer for the year with a rise of more than 11 percent, followed by Shanghai blue chips with gains of nearly 9 percent, though the latter dipped on Monday.

Wall Street has likewise been on a tear. Just last week, the Dow rose 2.08 percent, the S&P 500 2.22 percent and the Nasdaq 2.31 percent.

Quarterly earnings growth for the S&P 500 is estimated at 13.2 percent, according to Thomson Reuters data, up from 12 percent at the start of the year. Of the 133 companies in the index that have reported, almost 80 percent beat forecasts.

Another 36 percent of the S&P 500 is due to report this week including heavy hitters Apple, Alphabet, Facebook, Microsoft and Amazon.

The rush to equities combined with the risk of faster global inflation, has been a major negative for sovereign bonds with yields rising across much of the developed world.

Yields on U.S. two-year Treasuries have risen steadily to their highest since 2008 and are fully priced for a rate hike by the Federal Reserve in March.

Ten-year yields broke above the range of the last week or so to reach 2.69 percent on Monday, levels last visited in mid-2014.

The Fed holds its next meeting on Wednesday, the last for Chair Janet Yellen, and analysts suspect the statement will only cement expectations for a March move.