Asian shares steady, US dollar and oil hold onto gains but Mexican peso tumbles

A man sits on his motorcycle next to a board displaying the exchange rate of the Mexican peso against the US dollar outside a Mifel bank branch in Mexico City on Jan 26, 2017.
A man sits on his motorcycle next to a board displaying the exchange rate of the Mexican peso against the US dollar outside a Mifel bank branch in Mexico City on Jan 26, 2017.PHOTO: REUTERS

SINGAPORE (REUTERS) - Asian shares were steady on Friday (Jan 27) and were on track for a solid advance this week, while oil and the dollar held onto gains in the wake of strong US corporate earnings.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, but on track to end the week up 1.9 per cent.

Japan's Nikkei rose 0.3 per cent, extending gains for the week to 1.7 per cent.

South Korean markets are closed for holidays on Friday and Monday. Chinese markets are shut for the Lunar New Year holiday and will resume trade on Friday, Feb 3. Taiwan is also closed for Lunar New Year and will reopen on Thursday, Feb 2.

Overnight on Wall Street, the Dow Jones Industrial Average rose 0.2 per cent, remaining above the 20,000 level topped on Wednesday. The S&P 500 and the Nasdaq hit record highs during the session but inched back down to close little changed after two days of strong gains.

"US stock markets tend to be a sentiment leader for world markets and in what's become a familiar pattern over recent years, the quarterly profit reporting season is supporting that sentiment," Ric Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note.

"Around a third of companies in the S&P 500 index have now reported and overall earnings are ahead of consensus forecasts," he said.

European shares climbed to a one-year high on Thursday, lifted by Johnson & Johnson's US$30 billion deal to buy Swiss biotech firm Actelion. Germany's DAX index posted its highest close since May 2015.

In Asian trade early on Friday, the Mexican peso tumbled about 0.5 per cent against the dollar, as the spat between Mexico and the US intensified.

Mexican President Enrique Pena Nieto pulled out of a meeting in Washington after US counterpart Donald Trump tweeted that it would be better for the Mexican leader not to visit if Mexico wouldn't pay for a wall along the border.

On Thursday, the White House said Trump could pay for the wall with a new 20 per cent tax on goods from Mexico, but Trump's office then walked it back, saying that was an example of a way of making Mexico pay.

The dollar index, which tracks the greenback against its trade-weighted rivals, was up 0.1 per cent at 100.50 early on Friday, adding to Thursday's 0.35 per cent gain.

It is still set to end the week 0.2 per cent lower, thanks to market jitters earlier this week on Trump's protectionist inauguration speech.

The dollar was little changed versus the yen at 114.44 yen, after Thursday's 1.1 per cent surge, but was on track for a 0.1 percent weekly loss.

The euro was flat at US$1.0683 early on Friday, failing to make up any of its 0.6 per cent loss from Thursday.

In commodities, oil was steady in early trade, retaining its solid increases from Thursday that were driven by the resurgence of risk appetite, but a jump in US inventories capped the gains.

US crude inched down 0.1 per cent to US$53.71 a barrel, after Thursday's near 2 per cent surge. It is poised for a 2.5 percent weekly increase.

Gold slid lower on Friday in its fourth straight session of losses, as investors dumped the precious metal for riskier, higher returning assets.

Spot gold fell 0.1 per cent to US$1,187.50 an ounce, heading for a 1.8 per cent loss for the week, its first weekly decline in five, and its worst weekly performance this year.