Tuesday 03.15 BST. A global rally driven by hopes of extended monetary policy stimulus continued into Asia, putting a number of benchmarks on track for their longest winning streaks in at least two months.
Japan’s Nikkei 225 was up 1.4 per cent, on track for its first five-day winning streak since July 21. The broader Topix index was up 1.3 per cent, with its five-day upward run the longest since a nine-day streak to August 7.
Hong Kong’s Hang Seng added 0.6 per cent, its first four-day streak since late June.
Mainland China markets were still shut for the Golden Week public holiday.
Australia’s S&P/ASX 200 was up 0.9 per cent ahead of a policy decision from the Reserve Bank of Australia, which is expected to keep interest rates on hold at a record low 2 per cent.
The gains followed the lead from Wall Street, where the S&P 500 ended up 1.8 per cent to record its first five-day advance since December 23. The winning streak comes on the heels of five days of declines. The Nasdaq Composite advanced 1.6 per cent with a four-session string of gains equalling a run to July 14.
The advances also came despite a weaker outlook for the global economy. Data last Friday showed disappointing jobs growth in the US during September, and followed a slew of readings painting a dim picture of manufacturing sectors around the world.
That raised the prospect that central banks will have to increase their efforts to support their economies, and equity investors have taken a shine to the idea of the liquidity spigot remaining open for a while longer.
“The outlook for global growth has been further clouded by weakness in manufacturing and persistent capital outflows from emerging market economies,” said Christian Keller, Barclays head of emerging markets research. “We look for further accommodation from the Bank of Japan and European Central Bank in [the December quarter] to combat the deterioration in inflation, and we believe the Fed will refrain from hiking this year.”
Australia’s central bank is expected to keep interest rates on hold at 2 per cent, but slowing growth in China and the possibility of the US Federal Reserve delaying an interest rate rise put additional pressure on the RBA to support the domestic economy.
Data on Tuesday morning showed that Australia’s trade deficit had widened to A$3.095bn in August, a worse than expected number that sparked a brief dip in the Australian dollar. But the currency regained its composure and was trading 0.1 per cent higher at US$0.7087, on pace for a fifth straight day of gains that would be its longest upward streak in almost a month.
The Japanese yen was 0.04 per cent stronger at Y120.41 per US dollar ahead of the Bank of Japan’s policy meeting on Wednesday.
Indonesia’s rupiah strengthened as much as 2.3 per cent to 14,175 per dollar, the biggest one-day gain since April 2009. The currency has strengthened for the past three sessions as the Fed’s potential delay in raising interest rates weights on the dollar.
Oil prices were struggling for direction after a bounce on Monday. Brent crude was up 0.1 per cent at $49.32 a barrel while West Texas Intermediate was off 0.1 per cent at $46.22.
The price of gold was 0.1 per cent higher at $1,136.80 an ounce.
Energy and commodities shares have benefited as commodity prices have rebounded in recent sessions and fears about the financial health of Glencore, the miner and commodities trader, have eased.
In Australia, the materials sector was up 1.9 per and the energy sector was 1.1 per cent higher, the S&P/ASX 200’s best performers. In Japan, energy was up 2.9 per cent, the Nikkei’s best sector.
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