Global Markets Surge on Strong Fundamentals
Asian markets hit a 2 ½ month high on Thursday, riding the global buying wave as traders acted based on solid fundamentals worldwide. The Nikkei 225 was up 0.97 percent as of 2:07 p.m. HK/SIN and Hong Kong’s Hang Seng Index was up 0.48 percent. The ASX 200 was up 0.57 percent and South Korea’s Kospi was up 0.68 percent. Only the Shanghai Composite traded against the trend, declining 0.14 percent by mid-afternoon in Asia.
The Asian markets followed Wall Street higher. The Dow Jones Industrial Average rose over 300 points on Wednesday and crossed the 25,000-mark for the first time since mid-March. The surge was supported by a rise in the banking sector which was prompted by the higher interest rates. The Nasdaq also closed at a record high on Wednesday.
European markets are expected to open higher on Thursday after Italian Prime Minister Guiseppe Conte won a second confidence vote to confirm his government’s majority. In Spain, new Prime Minister Pedro Sanchez named this cabinet. These moves are expected to return some calm to the region after a tumultuous past few days. Also contributing to consumer confidence is U.S. President Donald Trump’s intention to meet with Canadian Prime Minister Justin Trudeau and French President Emmanuel Macron at the G7 summit which will be held at the end of this week. Though White House economic advisor Larry Kudlow said on Wednesday that Trump would not back down from his tough stance on trade issues, traders have interpreted his willingness to take these meetings as a positive sign.
The euro held near two-week highs on Thursday on growing expectations that the European Central Bank will announce plans to wind down its economic stimulus program. The common currency was up 0.17 percent against the dollar to trade at $1.1796. It also gained 0.07 percent against the pound to trade at 0.8781. The dollar continued its struggle on Thursday, falling below the 110 mark against the yen, to 109.97. The greenback was also lower against the pound and the Swiss franc.