Moneycontrol
Dec 08, 2017 08:00 AM IST | Source: CNBC

Nikkei leads move higher in Asia markets; China trade data due

The Nikkei 225 advanced 1.12 percent, rebounding after recording a near 2 percent fall in the middle of the week. Also providing support for the increase was the softer yen, which traded above the 113 level to the dollar. Automakers, tech names and trading houses recorded gains.

CNBC

Asian markets edged up in early Friday trade after U.S. markets finished higher on Thursday as investors stateside awaited developments regarding tax reform. Markets also awaited the release of trade data out of China for clues about the health of its economy.

Markets on the move

The Nikkei 225 advanced 1.12 percent, rebounding after recording a near 2 percent fall in the middle of the week. Also providing support for the increase was the softer yen, which traded above the 113 level to the dollar. Automakers, tech names and trading houses recorded gains.

Of note, Japan's third-quarter GDP was revised upward to 2.5 percent from the preliminary estimate of 1.4 percent, Reuters reported. On a quarterly basis, the economy grew 0.6 percent from one quarter ago, compared to the 0.4 percent forecast, the wire service added. Following the release, the dollar fetched 113.28 yen at 9:41 a.m. HK/SIN, above Thursday's close of 113.07.

The better-than-expected GDP figure "should further add to risk-taking," OCBC Treasury Research said in a morning note, adding that recovery in risk appetite in recent sessions came from progress made in U.S. tax reform proceedings.

Across the Korean Strait, the Kospi was mostly flat as gains in heavyweight tech names offset losses seen in automakers and several manufacturing plays. Samsung Electronics and SK Hynix were up 1.14 percent and 2.11 percent, respectively. Hyundai Motor fell 2.79 percent and steelmaker Posco slid 1.95 percent.

Down Under, the S&P/ASX 200 tacked on 0.22 percent as most energy-related plays rose on the back of oil prices climbing more than 1 percent in the last session. Oil Search gained 1.11 percent and Beach Energy added 3.61 percent, but Santos traded flat. Banks recorded gains while major miners traded in negative territory.

Greater China markets went higher in early trade. Hong Kong's Hang Seng Index rose 0.65 percent. On the mainland, the Shanghai Composite tacked on 0.17 percent and the Shenzhen Composite advanced 0.63 percent.

The lead up

Tax reform was in focus on Wall Street as investors anticipated potentially lower corporate taxes ahead. The Senate avoided a potential government shut-down when it passed a bill to extend funding for the federal government on Thursday.

A top Republican indicated on Thursday that the GOP's final tax bill could see certain deductions being adjusted. A joint tax bill now has to be ironed out after the House and Senate earlier passed separate versions.

U.S. stocks ended higher on Thursday as tech shares notched gains, with the Dow Jones industrial average rising 70.57 points, or 0.29 percent, to close at 24,211.48.

The dollar index, which tracks the U.S. currency against a basket of six major currencies, extended overnight gains to trade at 93.839 after climbing in the three days prior.

Meanwhile, bitcoin soared above $19,000 on Thursday on the Coinbase exchange, but later tumbled some 20 percent from that level. The cryptocurrency, which started the year under $1,000, has experienced massive moves in recent days.

Currency watch

The Australian dollar drifted lower after taking a hit following the release of poorer-than-expected trade data on Thursday. At 9:46 a.m. HK/SIN, the Aussie dollar traded at $0.7500, after falling as low as $0.7498 earlier. Ahead, moves in the currency will likely be influenced by trade data out of China due later in the session.

Corporate news

LG Display said "nothing has been set in detail" regarding a deal which would see the South Korean company supply OLED panels to Apple. The panel maker added that it would make an announcement about any developments "in a month," according to local media. LG Display shares erased early gains to trade flat.

Elsewhere, Taiwan Semiconductor Manufacturing Company said it would be investing approximately $20 billion in its latest planned plant, Reuters said. The new chip plant will reportedly be focused on 3 nanometer technology. TSMC shares were higher by 0.22 percent.

The commodities trade

Oil prices slipped after rising more than 1 percent overnight. U.S. crude futures lost 0.16 percent to trade at $56.60 per barrel. Brent crude shed 0.21 percent to trade at $62.07.

Also of note was a possible disruption in Nigeria after one of the country's main oil unions warned it could go on strike after an alleged "mass sacking," Reuters reported on Thursday.

What's on tap

Here's the economic calendar for Friday (all times in HK/SIN):

4:00 p.m.: Taiwan balance of trade
7:30 p.m.: India loan growthChina trade data is also due
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