Sunday, 25 August 2019

Asian stocks rise after U.S. government reopens for now

TOKYO: Asian stocks advanced on Monday as Wall Street rallied after a deal was announced to reopen the U.S. government following a prolonged shutdown that had shaken investor sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.2 percent.

South Korea’s KOSPI edged up 0.2 percent, New Zealand stocks were up a touch, while Japan’s Nikkei bucked the trends and eased 0.2 percent. Australian financial markets were shut for their ‘Australia Day’ holiday.Facing mounting pressure, U.S. President Donald Trump agreed on Friday to temporarily end a 35-day-old partial U.S. government shutdown without getting the $5.7 billion he had demanded from Congress for a border wall.

In response Wall Street rallied broadly on Friday as investors were heartened to see the back of the longest U.S. government shutdown in history.

The shutdown had left investors anxious and frustrated as it came at a time of heightened worries over slowing global growth, signs of stress in corporate earnings and a still unresolved Sino-U.S. trade war.

“The rise in the broader stock markets looks to keep going. The U.S. government reopening is definitely a plus for market sentiment,” said Soichiro Monji, senior economist at Daiwa SB Investments.

“There are still potential risk factors, such as the U.S.-China trade row and Brexit,” he said.

In the currency market, the pound stood tall, hovering near a three-month high of $1.3218 set on Friday on the back of optimism that Britain can avoid a no-deal Brexit.

Britain is set to leave the European Union on March 29, but the country’s members of parliament remain far from agreeing a divorce deal. That has kept markets, worried about the possibility of a disorderly Brexit, on edge for much of the last several weeks.

The euro was also on the front foot against the sagging dollar.

The single currency was 0.05 percent higher at $1.1412 after gaining 0.9 percent on Friday, paring the losses from earlier last week on dovish-sounding comments by European Central Bank President Mario Draghi.

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