Global stock rally shifts to Asia after US highs

[chahlley]

(Business Today Thursday 2 March 2017)

Global stock rally shifts to Asia after US highs

A board above the trading floor of the New York Stock Exchange shows the Dow Jones

industrial average closing number above 21,000, Wednesday, March 1, 2017.

Banks and other financial companies led U.S. stocks sharply higher,

pushing the Dow Jones industrial average to close above 21,000 points for the first time. Photo: AP

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Updated: 12:16 PM, March 2, 2017

NEW YORK — The bulls are gaining momentum as the global equity rally stretches to Asia.

Tokyo shares jumped to the highest level since December 2015 while equities from Australia to Hong Kong also climbed after US indexes set new records on signs growth is firming worldwide.

The US dollar extended gains after Federal Reserve Governor Lael Brainard supported the case for an interest-rate hike “soon”.

Treasuries fell for a fourth straight day and gold retreated.

Mr Brainard, who for months has played the role of lead dove at the Fed arguing to keep rates lower for longer, said in a speech at Harvard University “it will likely be appropriate soon to remove additional accommodation”.

Investors are looking ahead to a speech by Chair Janet Yellen on Friday to reaffirm a view that interest rates are likely to go up this month. The odds for a Fed rate hike in two weeks swelled past 65 per cent.

“The overwhelming feeling is positive,” said Mr Karl Goody, a private wealth manager at Shaw and Partners in Sydney, which oversees about A$11 billion (S$11.88 billion). “As long as Yellen keeps the same sort of stance, that’s what investors want at the moment. There’s a huge thirst and ultra-high demand from people with money trying to find a home. This is going to continue.”

Data showed US manufacturing expanded last month at the fastest pace in three years and an acceleration in German inflation added to signs of momentum in Europe’s largest economy.

While US President Donald Trump provided few specifics in his address to Congress, he reiterated broad proposals for boosting spending and cutting taxes that reinforced views that his administration will seek pro-growth policies.

On Wall Street, the Dow Jones Industrial Average blasted through the 21,000-point mark for the first time after breaking a streak of 12 straight record-setting sessions.

The Dow posted its largest daily percentage gain of the year at 1.46 per cent, after ending February with its fourth straight month of gains — an advance of nearly 15 per cent and its best four-month run since 2012.

The Dow first closed above 20,000 on Jan 25, when it ended the trading day at 20,068.51. AGENCIES