Asian shares gain as dollar remains on the back foot

Major indexes in Asia notched gains on Monday after Wall Street closed out last week at records and the dollar remained on the back foot.

The Nikkei 225 rose 0.28 percent as technology and financial names rose early in the session. Automakers proved to be a mixed picture.

Shares of SoftBank Group jumped 4.09 percent following news from Nikkei Asian Review that the company aimed to list SoftBank Corp., its mobile arm, both in Tokyo and abroad this year. The listing could raise around 2 trillion yen ($18 billion) for the company, Nikkei added.

SoftBank said in a statement the listing of its mobile unit was an option for the company, but that no official decision had been made.

Across the Korean Strait, the Kospi tacked on 0.14 percent. Heavyweight Samsung Electronics, which had fallen for most of last week on the release of poorer-than-expected profit guidance, traded flat. Other tech names, however, were in negative territory, with SK Hynix declining 2.28 percent. Meanwhile, bitcoin-exposed stocks retraced losses seen last week following news about a potential ban on cryptocurrency trading in South Korea. Omnitel rose 16.61 percent and Kakao advanced 2.49 percent.

Sydney’s S&P/ASX 200 rose 0.1 percent, with the materials and gold producer sectors among the best-performing. Major miners BHP and Rio Tinto were up 0.84 percent and 0.87 percent, respectively.

Gold producers were also in positive territory on strength in the yellow metal linked to dollar softness. Newcrest Mining rose 3.05 percent and Evolution Mining was up 5.66 percent.

In greater China markets, Hong Kong’s Hang Seng Index rose 0.77 percent in early trade, having closed higher for the 14th consecutive day on Friday. Currently trading at 31,653.47, the benchmark continued to march closer to its all-time high of 31,958.41.

Mainland markets traded lower. The Shanghai composite was off by 0.21 percent and the Shenzhen composite edged down 0.61 percent.

The People’s Bank of China on Monday set the yuan midpoint at 6.4574 to the dollar, its firmest level in more than 1 1/2 years, Reuters said. The on-shore yuan traded at 6.4326 at 10:11 a.m. HK/SIN while the offshore yuan traded at 6.4359. The central bank lets the yuan rise or fall a maximum of 2 percent against the dollar, relative to the fixing rate.

MSCI’s broad index of shares in Asia Pacific excluding Japan on Monday recorded a fresh record high, clearing a peak of 591.50 set in 2007. The index was up 0.47 percent at 592.96 at 9:51 a.m. HK/SIN.

U.S. stocks touched record levels on Friday after major banks, including J.P. Morgan and Wells Fargo, announced better-than-expected quarterly reports. Earnings season kicked off last week and is expected to be robust, with fourth-quarter S&P 500 profits forecast to increase 11.2 percent, according to UBS.

The Dow Jones industrial average advanced 0.89 percent, or 228.46 points, to close at a record high of 25,803.19.

U.S. markets will be closed on Monday for Martin Luther King, Jr. Day.

Meanwhile, data released Friday showed U.S. consumer prices excluding food and energy rose 0.3 percent in December from the prior month, beating the 0.2 percent forecast in a Reuters poll. Retail sales for December rose 0.4 percent compared to the month before while November figures were adjusted upwards.

The dollar index, which tracks the U.S. currency against a basket of six currencies, was mostly flat at 90.869 at 9:46 a.m. HK/SIN. That was below the close of 90.902 last session despite the positive consumer price read on Friday. The index had traded at levels around the 92 handle at the beginning of last week.

“The global reflation trade continues to be associated with a weaker greenback, which in turn, has amplified the market’s sensitivity to any posturing by the European Central Bank and the Bank of Japan to end their ultra-loose monetary policies,” DBS Group Research strategists Eugene Leow and Philip Wee said in a note.

The euro was mostly steady at $1.2198, near its highest levels in around three years. The common currency advanced following Friday news that German Chancellor Angela Merkel had made progress on the formation of a coalition government. It also followed the release of European Central Bank minutes earlier last week that had been interpreted as hawkish by markets.

Against the yen, the greenback edged lower to trade at 110.78.

In other public offering news, online finance platform Lufax aims to list in Hong Kong in April, the South China Morning Post reported on Friday, citing anonymous sources. Lufax’s potential IPO would come hot on the heels of other “new economy” companies in Hong Kong last year, including online-only insurer ZhongAn Online Property & Casualty Insurance.

Source: CNBC