Asian shares rise on global growth hopes, US shutdown’s end
HONG KONG (AP) — Asian stock markets posted strong gains on Tuesday, as an upbeat forecast for global economic growth and the end of the U.S. government shutdown helped lift sentiment.
KEEPING SCORE: Japan’s benchmark Nikkei 225 index jumped 0.9 percent to 24,037.86 and South Korea’s Kospi advanced 1.1 percent to 2,522.68. Hong Kong’s Hang Seng rose 0.7 percent to 32,749.79 and the Shanghai Composite in mainland China climbed 0.8 percent to 3,528.55. Australia’s S&P/ASX 200 gained 0.7 percent to 6,033.90.
GLOBAL GROWTH: The International Monetary Fund upgraded its outlook for the world economy, estimating that the world economy expanded 3.7 percent last year, the fastest pace since 2011. It forecast that the pace will accelerate to 3.9 percent in 2018-19. The IMF noted surprisingly strong growth in Europe and Asia and predicted that U.S. tax cuts will give the American economy a short-term boost.
SHUTDOWN: President Donald Trump signed a bill ending the U.S. federal government shutdown after nearly three days. Democrats agreed to a stopgap funding measure in exchange for Republican promises to resume debates on immigration and other issues. The agreement helped boost Wall Street though its effect on the dollar was minimal.
QUOTE: “It’s onwards and upwards for U.S. stocks and the leads are once again constructive for broad Asian equity appreciation,” said Chris Weston, chief strategist at IG in Melbourne. “The Teflon market continues in earnest and nothing sticks and very little is of concern, as has been the case for some time with the same macro factors keeping the positive trend in play.”
BANK OF JAPAN: Market watchers are awaiting the Japanese central bank’s latest policy statement. No big changes are expected but investors will be on the watch for any comments from policymakers on inflation or hints about when they plan to scale back a monetary easing program aimed at stimulating Asia’s second biggest economy through huge central bank purchases of government bonds.
TARIFFS: Trump approved tariffs on imported solar-energy components and large washing machines, in a move aimed at helping U.S. manufacturers. The tariffs, aimed at cheaper imports from rival makers in places like China and South Korea, raise the threat of a trade war between the U.S. and Asia. The companies that sought the tariffs said 30 U.S. solar-manufacturing facilities had shut in the past five years as China plotted to flood the global market with cheap products to weaken U.S. manufacturing.
WALL STREET: Major U.S. benchmarks had a strong finish. The Standard & Poor’s 500 index picked up 0.8 percent to close at 2,832.97. The Dow Jones industrial average rose 0.6 percent to 26,214.60. The Nasdaq composite added 1 percent to 7,408.03.
CURRENCIES: The dollar slipped to 110.69 yen from 110.93 yen in late trading Thursday. The euro weakened to $1.2261 from $1.2263.
ENERGY: Oil futures extended gains. Benchmark U.S. crude rose 35 cents to $63.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 26 cents to $63.57 a barrel on Thursday. Brent crude, used to price international oils, added 37 cents to $69.40 a barrel in London.