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Asia: Apple, global economic data fuel rally

2017-05-03T164533Z_564174076_RC164E2F6F10_RTRMADP_3_APPLE-STOCKS.JPG
A man uses his phone as he walks past an Apple store in Beijing, China on April 25, 2017.

[HONG KONG] A fifth consecutive record close on Wall Street helped fuel further gains for Asian stocks Wednesday, with bullish sentiment boosted by strong results from Apple and benign world economic data.

Traders took heart from the iPhone maker's stronger-than-expected results for the past quarter as well as accelerating eurozone growth and upbeat Chinese manufacturing figures.

Higher revenues and profits at Apple helped trigger fresh buying in Tokyo as a range of Japanese companies supply components for the California-based company's smartphone and other devices.

The Nikkei was up 0.4 per cent by the break, while Shanghai - which closed Tuesday at a record 2017 high - edged ahead while Hong Kong also gained in morning trade.

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Sydney stocks were a rare negative in the region after commodity prices fell.

"Equities... continue to flourish as earning reports drive stocks to new highs," said Stephen Innes, who heads Asia-Pacific trading at Oanda "The Dow reached a new-all time high for a fifth consecutive session, nibbling at the key 22k mark." New York's blue-chip index reached new highs on strong US earnings, but US economic data was mixed.

US DATA MIXED

A key measure of US inflation was flat in June for the second straight month, while the annual rate declined.

Manufacturing activity continued to expand in July, but at a slightly slower pace than in June, according to the Institute for Supply Management.

The dollar, which has come under sustained pressure from continued political instability in Washington, clawed back some losses with the yen trading at around 150 to the dollar in Tokyo.

"The US political crater and lack of fiscal stimulus from Washington will continue to be the primary catalyst for dollar declines," Mr Innes added.

"While the market is cautious about a possible USD risk reversal, searching for the key triggers are like looking for a black cat in a coal cellar."

A stronger greenback also helped push oil off recent highs, to end a rally which had seen WTI crude top US$50 a barrel for the first time since May.

The decline came after data from industry group API showed a surprise increase in US crude stocks, and reports of a rise in OPEC's July production, with traders awaiting an official US inventory report later in the day.

"People are really beginning to realise that the market probably needs a steady beat of bullish information to continue to rally," said Gene McGillian, market research manager at Tradition Energy.

"If we don't get a really positive inventory report this week, the market is vulnerable to a nice little turnaround," he said.

AFP

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