Japan shares up on weaker yen
Beijing, China (BBN) – Stocks in Asia higher on Tuesday following the global relief rally after the first round of France’s presidential election stoked a relief rally, with several regional markets jumping to multi-year highs.
In the French election, Emmanuel Macron garnered 23.7 percent of the vote and will face off against far-right candidate Marine Le Pen, who secured 21.7 percent, in a run-off on May 7, reports cnbc.com.
The euro traded at $1.0857 against the dollar, off the five-month high of $1.0935 hit earlier.
“France would be set on two very different courses depending upon who wins the election. Macron is pro-euro, pro-European Union whereas Le Pen wants a referendum on EU membership … With this in mind, there has been very little follow through in the euro during Asia, European and North American trading sessions,” said BK Asset Management Managing Director Kathy Lien in a note.
Markets are also keeping an eye on developments on the Korean Peninsula as the USS Carl Vinson aircraft carrier-led battle group heads to the Sea of Japan. China called for restraint in dealing with North Korea when Chinese President Xi Jinping spoke with U.S. President Donald Trump over the phone yesterday.
Japan’s benchmark Nikkei 225 index was 0.84 percent higher. It was on a tear in the previous session, closing up 1.2 percent. The Kospi climbed 0.5 percent higher to trade at 2,184.49, hitting a two-year high earlier in the session.
Markets in greater China were also higher. Hong Kong’s Hang Seng Index climbed 0.79 percent. The Shanghai Composite was 0.22 percent higher while the Shenzhen Composite gained 0.791 percent. Chinese stocks tumbled almost 2 percent and posted their worst session in 2017 in the previous session.
Other markets in the region also posted significant gains, with Malaysia’s benchmark stock hitting its highest levels since May 26, 2015. Philippine shares soared 1.1 percent and were at their highest since October 21, 2016 earlier in the session at 7,669.6, Reuters noted.
Markets in Australia and New Zealand are closed for ANZAC day.
Meanwhile, HSBC was formally mandated to advise Saudi Arabian oil company Aramco on its initial public offering, which could potentially be the largest IPO in the world. HSBC shares traded 1.03 percent higher.
In currency news, the U.S. dollar gained against the loonie, up 0.41 percent to 1.3554 after U.S. Commerce Secretary Wilbur Ross said on Monday his agency will impose new anti-subsidy tariffs averaging 20 percent on Canadian softwood lumber imports, a move that escalates a long-running trade dispute between the two countries.
The dollar traded higher against a basket of rivals at 99.176 after previously falling to the 98 handle on the back of euro strength. The greenback gained against the yen to trade at 110.08, off the 109 handle seen earlier in the day. The Australian dollar traded at $0.7555.
“With ‘risk on’ buoying commodities, the Aussie dollar moved up more decisively towards 76 cents. But iron ore’s price recovery remained a tad shallow, and shy of $70; and this was cause to pause and be a little more circumspect about sustained rallies (in both the Aussie and iron ore),” Mizuho Senior Economist Vishnu Varathan said.
“In addition, Trump’s tax reform plans and the implied or inferred support for infrastructure is bound to move both — iron ore more directly, and the Aussie on both iron ore and the impact from U.S. Treasury yields.”
Oil prices ticked up after earlier declining on doubts that OPEC would extend output cuts. U.S. crude traded 0.47 percent higher at $49.46 a barrel while Brent crude futures were up 0.5 percent at $51.86.
On the economic front, South Korea reported that April consumer confidence data hit a six-month high. It was the third straight month consumer confidence has increased on month.
Hong Kong March trade data is expected at 4:30 pm.
Over in the U.S., equities surged on the back of Macron’s victory in the first round of the French election, with major indexes gaining more than 1 percent. European markets also finished higher, with the French benchmark CAC 40 index surging more than 4 percent.
Investors stateside are eyeing Trump’s plans to accelerate tax reform plans. Trump is pushing for a 15 percent corporate tax rate even if it could potentially increase the budget deficit, the Wall Street Journal reported.
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