Following the recent decline in the US Dollar, Asian stocks rallied to more than a three-month high as the Dow Jones Industrial Average rose up for the first time above the 20,000 level. The rally also led to a strong recovery in the Wall Street just after one trading session.
The Nikkei 225 rose up by 1.59% to 19,361 in Japan driven by the stronger yen for the second time in a row. Meanwhile, the Chinese benchmarks including the Shanghai composite and the Shenzhen CSI 200 index rising up by 0.03% respectively and 0.23% respectively while the Hang Seng index in Hong Kong advanced by 1.39% to 23,366. South Korea’s Kospi also rallied by 0.9%.
The Trump Effect
Just within a week after his inauguration, Trump have taken steps into fulfilling his campaign plans including ending the Trans-pacific deal and signing a memorandum to advance the construction of the Dakota Access Pipeline and the Keystone XL which has led to a weaker greenback driving Asian stocks higher. As Trump’s recent actions have sent the US currency lower, most Asian Indexes rose up boosted by investor confidence that President Trump will be implementing policies which will lead to the growth of companies operating mainly in Asia.
Trump also threatened that a sky-high border tax of around 35% would be given to companies who would operate outside of the country. Despite the positive effect of the weaker dollar to most Asian markets, shares of major Asian exporters declined on the border tax statement from the US president.
Individual Market Gainers
In Japan, one of the highest gainers included automobile maker Toyota rallying by 1% while Honda rose up by 2% while MSCI’s biggest Asia-Pacific index shares advanced by 0.8% recording its highest level since October 11.
Japanese tech giants like Sony and Toshiba also rallied by not less than 1% while Canon inched 0.5% higher. Meanwhile, Sumitomo Chemical rallied by more than 3% on news that the company will acquire Trinseo from U.S. in a joint venture for ten million dollars. In Japan’s banking sector, Mitsubishi UFJ Financial jumped by 4%. The Chiba Bank also rose by 37 points or 5.19% up to 750.0.
Nomura Holdings also rallied by around 5% while Tokyo Electron Ltd was among the best performers on the Nikkei 225 rising up by 5.69%, 645 points higher to 11985.0.
As the Hang Seng Index and Shanghai composite rallied, Hong Kong and Chinese stocks rallied during pre-holiday trading with Chinese online company Tencent rallying by 1.5% at HK$200.8 as the Nasdaq composite posted a new record last Tuesday.
Casinos such as Galaxy Entertainment Group rallied high to 2.4% which was also led by the incoming Chinese New Year holidays set to boost entertainment company sales while Chinese resort developer Sands China rose by 1.3% to HK$35.35.
Top Hong Kong broadcaster Television Broadcasts(TVB) jumped by as much as 11.3% to HK$29.6 on the company’s announcement of their share buyback plan around HK$4.21 billion. A buy rating was given to the stock by the Bank of America Merrill Lynch recently as the company took actions in improving their business strategy and retail market. Meanwhile, TBV subsidiary Shaw Brothers Holdings rallied at 6.6% to HK$0.81.
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