Asian Stocks Extend Gains on Strong U.S. Stocks

Asian stocks broadened gains on Tuesday as all-night strength on U.S. stocks and the Federal Reserve’s cautious turn strengthened craving for riskier assets, while the dollar held firm on last week’s upbeat U.S. data.

Asian stock market data on monitor or chart display.

MSCI’s widest index of Asia-Pacific shares outside Japan advanced 0.4 percent and floated close to its four-month high marked on Friday.

Japan’s Nikkei average was flat on the day but at its highest level in seven weeks.

Australian shares climbed 2.2 percent, with long-battered financials surging on short-covering after a special government-scheduled inquiry criticized Australia’s financial sector for wrongdoing but left the building of the nation’s influential bank in place.

Elsewhere in Asia, trade was light, with markets in greater China, Taiwan, South Korea, Singapore and Indonesia all closed for the Lunar New Year.

On U.S. stocks, the S&P 500 increased, with technology and industrials the biggest winners as investors prepared for another large week of fourth-quarter company income reports.

After the chime, Google operator Alphabet tumbled around 3 percent as its higher expenses in the fourth-quarter concerned investors even as its revenue and profits beat the U.S.’s anticipations.

MSCI’s gauge of stocks across the worldwide reached a two-month high, having increased above 13 percent from its close to two-year low late in December, helped by the Fed’s change of tack.

Fed Chairman Jerome Powell has signaled its three-year tightening drive might come an end in the midst of a suddenly overcast outlook for the U.S. economy because of worldwide development worries and the U.S.-China trade argument.

The Fed said in a statement that Powell had told President Donald Trump and Treasury Secretary Steven Mnuchin late on Monday that “the path of policy will depend entirely on incoming economic information.”

Data publicized on Friday showed U.S. job development surged in January while an important gauge of U.S. industrial sector showed surprising resilience after December’s shocking plunge, alleviating worries the U.S. economy might be losing momentum rapidly.

Hiroshi Nakamura, senior manager of investment planning at Mitsui Life Insurance, said financial markets’ positive reaction to the U.S. data is diminishing with time, but hopes for a U.S.-China trade deal “will continue to support markets until the two sides come to formal decisions”.

The dollar was on a strong footing as investors continued to lap-up Friday’s strong payrolls number and an industrial survey.

The dollar’s index versus six major currencies was slight changed at 95.833, having increased 0.27 percent on Monday.

The euro was also stable at $1.1436, off three-week high of $1.15405 set on Thursday.

The greenback firmed to 109.98 yen, having ascended to 110.165 all-night, its highest level in five weeks.

The British pound barely stimulated and was at $1.3038.

On Monday, sterling rapidly removed brief gains following a newspaper report that merchandises shipped to Britain from the European Union could be waved through with no checks in the event of a “no-deal” Brexit.

The Australian dollar increased 0.3 percent to $0.7247, removing earlier losses, following the Reserve Bank of Australia left policy unchanged at its first gathering of this current year but sounded less dovish than anticipated.

Earlier on Tuesday, it dropped as much 0.5 percent after a plunge in retail sales strengthened worries about slowing development in Australia.

In commodity markets, oil prices inched up, buoyed by anticipations of tightening worldwide supply in U.S. sanctions on Venezuela and manufacture cuts led by OPEC.

U.S. West Texas Intermediate (WTI) crude futures increased 0.5 percent to $54.82 a barrel, after hitting a 2-1/2-month high of $55.75 in the preceding session, while Brent futures were last up 0.4 percent at $62.77.

Gold prices held close to one-week lows hit in the preceding session, pressured by a stronger dollar and investor longing for riskier assets picked up.

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