Asia shares track Wall Street to record highs
Asian stocks followed Wall Street higher on Thursday, led by record highs in Japan, South Korea and Taiwan, as investors ignored rising oil prices due to shipping woes in the Gulf and focused on strong corporate earnings.
Overnight, the S&P 500 climbed 1.0 percent and the Nasdaq jumped 1.6 percent to close at record highs; This was helped by a strong start to the earnings season, which eased concerns about the health of the U.S. consumer despite rising energy prices due to the Iran war.
This was despite oil prices rising for the fourth consecutive day. Iran on Wednesday seized two container ships seeking to exit the Gulf via the Strait of Hormuz, tightening its grip on the critical waterway as a fragile ceasefire hangs in the balance for now.
Brent crude futures rose 0.5 per cent to US$102.45 ($A143.13) per barrel, rising 3.5 per cent to over US$100 ($A140) overnight. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.0 percent to a record high as tech heavyweights rose in the region.
Markets in Japan, South Korea and Taiwan rose to records for a second day, with the Nikkei surpassing the 60,000 level.
China’s blue chips rose 0.3 percent, while Hong Kong’s Hang Seng index fell 0.3 percent.
“Markets have been and can continue to be extremely effective at assessing risks. But as solutions become more difficult, the list of risks grows,” said Laura Cooper, global investment strategist at asset manager Nuveen.
“Dissonance cannot last forever… At some point, the weight of what is being ignored may become the only thing that matters.”
Wall Street futures in Asia fell after earnings-driven rise; Nasdaq futures fell 0.2 percent and S&P 500 futures fell 0.3 percent.
Shares of GE Vernova rose 13.75 percent after the energy equipment maker raised its annual revenue forecast on the AI boom, and Boeing rose more than 5.0 percent after a smaller-than-expected quarterly loss.
Electric car maker Tesla reported a surprise positive free cash flow in the first quarter, but its prediction of sharply higher spending plans on artificial intelligence and robotics raised investor skepticism, and its shares fell 2.0 percent after the bell.
Despite the rise in oil prices, treasury bonds have remained mostly stable. The US two-year bond yield remained at 3.8064 percent after rising 1 basis point (bp) on Wednesday. The yield on the 10-year bond rose 1 basis point to 4.3094 percent, little changed overnight.
Currencies were mostly flat, with the dollar making small gains overnight. The euro was steady at $1.1709 (A1.6358), losing 0.3 percent overnight, just above a 10-day low of $1.1691 (A1.6333).
“It is questionable whether financial markets have correctly priced in the fact that supply constraints will continue to be an issue for some time,” said Skye Masters, head of market research at National Australia Bank.
Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
