Australia, S Korea stocks gain as US markets reach another record

Shi'ite Popular Mobilization Forces from a bomb attack outside of Hawija, Iraq © Reuters

Tuesday 03:20 BST

What you need to know

• Sydney gets boost from record close in New York
• Rio Tinto nears five-year high
• Oil rally cools in Asia trading
• Chinese stocks weaken

Overview

Equities in Asia were mixed but sentiment stayed positive. The Australian and South Korean bourses rose after three of the biggest equity gauges on Wall Street hit record closes overnight but markets in Japan, Hong Kong and China were flat or edging lower.

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Energy companies, which had helped underpin gains in the US, were higher with the S&P/ASX energy index up 0.6 per cent in Sydney. That came even amid a cooling of the latest oil price rally spurred by clashes in Iraqi Kurdistan.

The MSCI Asia Pacific ex-Japan index was testing fresh 10-year highs. IG market strategist Jingyi Pan said that with optimism in the US market and crude prices gaining overnight, “Asian markets are only expected to sustain in this glow today”.

Commodities

The price of West Texas Intermediate, the main US marker, was down 0.2 per cent at $51.79 a barrel, while Brent crude, the international benchmark, was flat at $57.82. Oil on Monday touched its highest level since late September after conflict broke out between Iraqi and Kurdish forces near the oil-rich city of Kirkuk, following the Kurdistan Regional Government’s independence referendum last month.

The price of gold slipped 0.1 per cent to $1,292 an ounce.

Equities

The broadly stronger commodities market overnight saw the basic materials segment lift Sydney’s S&P/ASX 200 0.7 per cent. Mining group Rio Tinto hit a near-five-year high on improved iron ore shipments.

South Korea’s Kospi index posted softer gains, adding 0.1 per cent. Japan’s Topix was flat. The main bourses in Shanghai and Shenzhen, expected to be quiet this week with China’s 19th Party Congress in Beijing, were down 0.2 per cent each. Hong Kong’s Hang Seng index was 0.3 per cent lower.

Forex and fixed income

Currency markets were fairly quiet, with the US dollar index that measures the currency against a basket of peers gaining 0.1 per cent. The South Korean and Chinese currencies made the biggest movements against the greenback, with the won weakening 0.4 per cent to Won1,131.70 and the renminbi 0.3 per cent softer at Rmb6.5996.

The Australian dollar was down 0.2 per cent at $0.7838 while the New Zealand dollar was flat. The Japanese yen gained 0.1 per cent to ¥112.03.

In debt markets, the yield on the US 10-year bond was up 3 basis points at 2.3 per cent, while the Japanese and Australian equivalents were each 1 bp higher at 0.066 per cent and 2.753 per cent, respectively.

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