Asian stocks surpass 2007 peak in global rally

[SYDNEY] - Asian stocks climbed to a record, buoyed by fresh all-time highs for US equities with investors energized by the outlook for profits and tax reform.

Japan's Topix index was up 0.5 per cent as of 9:30am in Tokyo. The Nikkei 225 Stock Average climbed 0.8 per cent. Australia's S&P/ASX 200 Index rose 0.2 per cent. South Korea's Kospi index added 0.8 per cent.

Contracts on Hong Kong's Hang Seng Index gained 0.8 per cent.

The MSCI Asia Pacific Index advanced 0.5 per cent, breaking through its 2007 peak as trading got underway in the region on Wednesday, with shares higher in Tokyo, Sydney and Seoul. The MSCI Emerging Market Index extended a rally that took it to the highest in more than six years.

S&P 500 Index contracts were little changed. The underlying measure climbed 0.7 per cent.

All major American benchmark equity indexes reached all-time highs on Tuesday and Goldman Sachs Group lifted its forecast for US stock gains in 2018, saying strong economic growth and tax reform will improve corporate earnings.

The US dollar maintained losses as the Treasury yield curve flattened further amid a global sovereign-bond rally.

While the Thanksgiving holiday gives traders an excuse to pause, global stocks are adding to what's been a stellar year for equity returns amid optimism about global growth and company earnings. The bond market has been showing fixed-income traders are more concerned that the US economy may slow with the gap between the yield on longer dated Treasuries and shorter-term bonds narrowing to levels not seen for 10 years.

"The earnings picture is dominant and that's of course what has, and will continue, to move markets," Bob Doll, chief equity strategist at Nuveen Asset Management, told Bloomberg TV. "Icing on the cake is the tax bill and that does boost earnings but a lot of people are already baking that into their assumption."

The Australian dollar rose back toward 76 US cents as traders latched onto comments by Reserve Bank of Australia Governor Philip Lowe who suggested the next move in interest rates will be up, even though there is no case for borrowing costs to change in the near term. Third-quarter construction jumped 15.7 per cent from the previous quarter, beating estimates of a 2.3 per cent drop.

The Bloomberg Dollar Spot Index was little changed. The yen was at 112.26 per dollar, up 0.2 per cent.

The Aussie dollar rose 0.2 per cent to 75.93 US cents. The euro was steady at US$1.1745.

The pound was little changed at US$1.3248.

West Texas Intermediate crude was back above US$57 a barrel, adding 0.4 per cent to US$57.07. An industry report was said to show inventories of US crude declined for the first time in three weeks.

Gold was steady at US$1,281.93 an ounce.

BLOOMBERG