Asian stocks at 19-month highs as Wall Street extends record run

Wall Street pushed further into record-high territory on Wednesday, helped by a round of positive economic data and ongoing optimism that President Donald Trump will cut corporate taxes.PHOTO: REUTERS
Pedestrians in front of an electric quotation board flashing share prices of the world in Tokyo on Feb 10, 2017. Asian stocks edged up to fresh 19-month highs on Thursday (Feb 16).
Pedestrians in front of an electric quotation board flashing share prices of the world in Tokyo on Feb 10, 2017. Asian stocks edged up to fresh 19-month highs on Thursday (Feb 16).PHOTO: AFP

HONG KONG (REUTERS) - Asian stocks edged up to fresh 19-month highs on Thursday (Feb 16), helped by an extended rally on Wall Street and strong US data though the dollar stepped back after a recent bounce.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent, rising to its highest since July 2015. It is up by a tenth so far this year partly underpinned by more optimistic earnings expectations and a gradual unwinding of bearish emerging market bets.

Australian stocks advanced 0.4 per cent in early deals with looming jobs data the key event risk on the day. A strong showing would set the market up for further gains with technical indicators helping.

"The index has now closed above the key technical resistance level at 5,800 which is a bullish sign opening up further gains in the coming months back towards 6,000," said James Woods, global investment analyst at Rivkin Securities in Sydney.

Wall Street pushed further into record-high territory on Wednesday, with the S&P 500 notching a seven-session winning streak, helped by robust economic data and optimism that President Donald Trump will cut corporate taxes.

That optimism was not shared in the currency markets with the US dollar's recent bounce running out of steam as investors took profits even as fresh data showed a pick up in inflationary pressures.

US consumer prices recorded their biggest increase in nearly four years in January, backing expectations for the Federal Reserve to raise interest rates at a steady pace over the course of the year.

Fed chair Janet Yellen, in her second day of economic testimony before Congress, offered no additional insight on the timing of the central bank's next rate hike after her comments a day earlier had hinted at a fairly hawkish policy stance.

Traders may also be leaning towards a rate increase delayed beyond the Fed's March meeting, with the futures markets only pricing a 27 per cent chance of a tightening next month.

The dollar index, which measures the currency against a trade-weighted basket of six major peers, slipped to 101.02. It rallied to a one-month high of 101.76 on Wednesday.

In commodity markets, oil prices softened as record high US crude and gasoline inventories fed concerns about a global glut. US crude was down 0.15 per cent at US$53.03 a barrel and Brent was flat at US$55.75 a barrel.