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=ASIA MARKETS: Dollar’s Data-Driven Weakness Lifts Nikkei Asia300 Index

HONG KONG (Jun 19) -- Asian stocks outside of Japan rose on Monday, tracking gains in regional currencies after disappointing U.S. economic data took a toll on the dollar.

The Nikkei Asia300 Index added 0.8% or 9.4 points to 1,248.12. Regional technology stocks rose on Monday, shrugging off a third straight drop on the technology-heavy Nasdaq Composite on Friday. Tencent Holdings added 2.3% in Hong Kong, while Samsung Electronics rose 2.2% in Seoul and Taiwan Semiconductor Manufacturing Co rose 0.7% in Taipei.

The dollar index, measured against a basket, fell 0.3% on Friday after U.S. housing data for May released on Friday disappointed markets and the University of Michigan’s closely-followed preliminary U.S. consumer confidence index for June also came in below analyst estimates. The latest numbers, which follow weak retail sales and inflation data last week, reinforced doubts about additional rate increases by the Federal Reserve this year.

“The USD pulled back broadly on Friday amid risk aversion spurred by weaker-than-expected data. EM Asian currencies are likely to recoup some losses on Monday,” Gao Qi, FX Strategist (EM Asia), wrote in a note. “In addition, Dallas Fed President Robert Kaplan said Friday that the US central bank should not raise interest rates again without confidence inflation is heading toward its 2% target.”

Markets await speeches from a host of U.S. policymakers this week for further cues, including New York Fed President William Dudley, Chicago Fed President Charles Evans, Boston’s Eric Rosengren and Dallas’s Kaplan.

Regional investors are also watching index provider MSCI’s decision, due early Wednesday in Asia, about whether it will include China’s A-shares in its Emerging Markets Index after deciding against it for three years.

The country gauge for China rose 1.4% on Monday. Average new home prices across 70 major Chinese cities rose 0.7% in May from a month ago, according to Reuters’s calculations based on National Bureau of Statistics (NBS) data.

Hong Kong’s index added 1.1%.

The Nikkei Asia300 South Korea Index edged 0.1% higher, while Taiwan’s gauge rose 0.8%.

Malaysia’s index shed 0.4%, led by losses in lenders. Hong Leong Financial Group and CIMB Group Holding fell 0.9% and 0.3%, respectively. Top Glove lost 2.1% after at least two brokerages cut their target price on the stock. The glove maker is up over 20% May and June.

Mobile operator Maxis requested for halt in trading of its shares on Monday. Malaysia’s second-largest mobile telecom company by revenue is selling 300 million new shares, or about 4.0% of its equity capital, to raise up to 1.725 billion ringgit ($404 million), according to a term sheet.

Singapore’s gauge added 0.6%, helped by an at least 2% advance in real estate companies City Developments and UOL Group.

In the rest of Southeast Asia, indexes for Indonesia, Thailand and the Philippines edged at least 0.2% higher, while Vietnam’s gauge added 0.8%.

India’s index rose 0.7%. Lenders in India advanced amid reports the nation’s central bank asked them to start bankruptcy proceedings against 12 large defaulters. Two of the nation’s largest lenders State Bank of India and ICICI Bank added at least 0.9% each.

Dr. Reddy’s Laboratories fell 0.8% after it said on Friday that the U.S. Food and Drug Administration had made an observation regarding manufacturing practices at the drugmaker’s Srikakulam plant in the southern Indian state of Andhra Pradesh.

Tata Steel rose 3.4% after holding company Tata Sons said it will buy the steelmaker’s stake in Tata Motors on or after June 23. The holding company will buy about 83.6 million Tata Motors shares held by Tata Steel at the prevailing stock price on the data of the deal. Tata Motors slipped 0.7%.

- By Nimesh Vora and V. Phani Kumar;; +852 3960 5102
- Edited By Suzannah Benjamin
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