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Asia: Markets start week with gains, tracking Wall Street

[HONG KONG] Asian markets rose on Monday, building on last week's gains as investors tracked another positive lead from Wall Street, although the dollar was unable to press higher following more weak US inflation figures.

Equities around the world continue to rally on optimism about the global economy and the current corporate earnings season, with all three main New York indexes sitting around record highs and Tokyo at levels not seen in more than two decades.

Tokyo stocks extended Friday's 21-year high following strong earnings by Japanese companies, largely shrugging off the Kobe Steel falsified data scandal and a relatively strong yen.

The Nikkei 225 index, which hit the highest level since November 1996 on Friday, rose 0.6 per cent by the break.

Hong Kong was up one percent in early trade, although Shanghai saw more cautious gains as as investors awaited the release of September inflation data, and this week's twice-a-decade Communist Party congress.

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There were also healthy gains in Sydney, Seoul and Singapore.

Investors in Asia were encouraged by Wall Street gains Friday after retail sales in the world's biggest economy jumped 1.6 per cent last month due to strong trade in cars, car parts and fuel following US hurricanes - the largest monthly increase since March 2015, Commerce Department data showed.

Mr Trump's announcement that he was "decertifying" the Iran nuclear deal also boosted oil prices.

The US president stopped short of nullifying the deal, but sent the agreement to Congress and warned "our participation can be canceled by me as president at any time".

Mr Trump's announcement was expected, blunting some of its impact on markets.

The dollar was unable to break out against its major peers as US inflation figures remain stubbornly low. However, Federal Reserve chief Janet Yellen voiced optimism that consumer prices will soon increase, a position echoed by European Central Bank chief Mario Draghi.

"My best guess is that these soft (inflation) readings will not persist," Ms Yellen told weekend IMF meetings, adding that "with the ongoing strengthening of labour markets, I expect inflation to move higher next year".

Meanwhile, Bank of Japan Governor Haruhiko Kuroda signalled Sunday that loose monetary policy would continue in a bid to boost inflation.

"The Bank of Japan will consistently pursue aggressive monetary easing with a view to achieving the price stability target at the earliest possible time," Kuroda said at a meeting of the Group of 30 in Washington.


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