Asian stocks hover near decade peak, euro reaches 2-month high

A pedestrian looks at an electronics stocks indicator displaying numbers of the Tokyo Stock Exchange in Japan.
A pedestrian looks at an electronics stocks indicator displaying numbers of the Tokyo Stock Exchange in Japan. PHOTO: AFP

TOKYO (REUTERS) - Asian stocks hovered near a decade high on Monday (Nov 27) as a robust business outlook continued to support investor risk appetite, while the euro reached a two-month top against the dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan swerved in and out of the red and was last a shade lower at 567.94, still in striking distance of a 10-year peak of 570.21 scaled on Thursday.

Asian stocks were lifted by Wall Street shares' record highs on Friday. Technology stocks led the S&P 500 and Nasdaq, while Amazon and retail stocks got a boost from signs of a strong start to the holiday shopping season.

Equity markets have enjoyed strong support this year thanks to corporate earnings rising on the back of an improving global economy.

Australian stocks climbed 0.35 per cent and Japan's Nikkei rose 0.2 per cent. South Korea's KOSPI slipped 0.4 per cent.

"In addition to the overall boost from gains in US shares, the bounce in crude oil is also supporting energy shares," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. The recent focus from an equity market point of view has been on strong corporate performance."

US crude oil futures rose to a 2½-year high of US$59.05 per barrel on Friday. A continued shutdown of a US-Canada pipeline triggered supply concerns, while the prospect of OPEC extending production cuts when the group meets this week also boded well for oil.

Nonetheless, US crude was last down 7 cents at US$58.88 per barrel, while Brent crude slipped 5 cents to US$63.81 per barrel.

In currencies, the euro traded little changed at US$1.1926 after nudging up to US$1.1946 earlier, its highest since Sept 22.

The common currency rode on momentum from Friday, after data showed German business confidence hit a record high in November, a sign the European Union's largest economy is on track for a boom.

The indicator was the latest euro zone data which showed that the region's business growth continues to roar ahead.

The euro was also helped by Germany's Social Democrats'agreement on Friday to hold talks with Chancellor Angela Merkel on renewing their outgoing coalition government.

Political uncertainty in Germany stemming from the Merkel's apparent failure to form a governing coalition talks knocked the euro early last week.

The euro's strength pushed the dollar's index against six major rivals to 92.789, not far from a two-month low of 92.675 plumbed on Friday.

The dollar added 0.1 per cent to 111.635 yen.

The Australian dollar dipped 0.1 per cent to US$0.7611 after rising nearly 0.75 per cent the previous week.