Asia: Markets rally stumbles after recent surges

[HONG KONG] The rally that has seen in 2018 stuttered Friday as most Asian markets struggled with profit-taking, with investors unable to track more records on Wall Street.

Dealers are now turning their attention to the release later in the day of key US jobs data, which is expected to show the world's top economy continuing to improve.

A forecast-smashing reading Thursday on private take-ups boosted optimism, which had already been bolstered by US tax cuts, healthy corporate profits and strong manufacturing figures from around the world.

Global markets powered ahead in 2017 as economies showed long-running improvements after years of faltering while a surge in oil prices to around three-year highs has provided a bright start to January.

And Greg McKenna, chief market strategist at AxiTrader, said in a note that data from the manufacturing and services sectors "suggests economic strength across the globe remains robust".

He noted that an index of world factory activity was at its highest level in seven years.

On Wall Street the Dow ended above 25,000 for the first time, leading records across Wall Street.

However, Asia was mixed on Friday.

In Tokyo the Nikkei ended the morning up 0.2 per cent at a 26-year high following its more than three per cent jump on Thursday, while Sydney added 0.6 per cent.

Seoul rose 0.7 per cent, with dealers buoyed by news that North Korea had accepted the South's offer of talks next week, further easing geopolitical tensions in the region.

But Hong Kong and Shanghai each lost 0.1 per cent and Singapore eased 0.3 per cent.

On forex markets the dollar dipped slightly against the euro, with the eurozone continuing to improve and raising the chances of a reduction in the region's massive stimulus programme, bringing monetary policy in line with the Federal Reserve.

Mr McKenna added: "It's again the story of a weaker US dollar as the fact its data is solid and improving is lost on traders focused on expectations that the EU strength will drive the European Central Bank to chase the Fed, and that synchronised global growth will, in fact, drag most central banks along the tightening path."

AFP