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May 27, 2017

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Australian stocks drive Asian markets higher

HONG KONG--Australia's stock market and currency jumped Thursday after encouraging economic data while gains on other major world benchmarks were more modest as investors waited for key policy meetings in Europe and a major U.S. job report.

Australia's S&P/ASX 200 rose 1.2 percent to 5,129.20 and the Australian dollar rose to its highest in more than three weeks after the government reported a surprise trade surplus in December. Economists had been expecting a deficit.

Economists at Societe Generale wrote in a report that the trade figures as well as "solid" growth in December retail sales indicate strong economic growth in the final quarter of 2013 for Australia, which has been contending with a cooling mining boom.

In early European trading, Germany's DAX climbed 0.6 percent to 9,167.85 while France's CAC 40 advanced 0.4 percent to 4,133.09. The FTSE 100 index of leading British companies was up 0.3 percent to 6,477.90

U.S. stocks were poised to edge higher. Dow futures rose 0.1 percent to 15,389.00 while S&P 500 futures added 0.2 percent to 1,747.40.

Asian stocks were stabilizing after sharp declines earlier in the week.

Tokyo, which spent most of the day in positive territory, surrendered in late trade to close down 0.18 percent, or 25.26 points, at 14,155.12.

However, Seoul added 0.88 percent, or 16.57 points, to 1,907.89. Hong Kong climbed 0.72 percent, or 153.75 points, to end at 21,423.13.

Shanghai and Wellington were closed for public holidays.

The turmoil of the past week has subsided briefly before the non-farm payrolls figure due on Friday, which will give traders a better handle on the state of the U.S. economy.

"The tension in the buildup to Friday's U.S. non-farm payroll data is heavy with the increased uncertainty over where the U.S. economy is headed," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

World markets were sent into a tailspin last week on fears for the global economy, fuelled by downbeat U.S. and Chinese manufacturing data as well as the Federal Reserve's decision to further reduce its stimulus program.

Most economists tip further selling if Friday's employment data misses expectations.

"Range trading is likely to dominate" before those events, said Mitul Kotecha, Asian head of global markets research for Credit Agricole CIB.

A report by payrolls firm ADP on Wednesday showed the U.S. private sector added 175,000 jobs in January, slightly below the forecast 178,000.

However, analysts said the figures may have been skewed by the severe cold weather over the past few weeks.

On Wall Street the Dow ended flat, the S&P 500 dipped 0.20 percent and the Nasdaq lost 0.50 percent

"There is just enough uncertainty to make players feel uncomfortable about committing too strongly to stocks right now, despite the recent market falls," Chibagin Asset Management general manager Yoshihiro Okumura told Dow Jones Newswires.

"Things could change on a dime and nobody wants to get caught in another rout if the numbers disappoint."

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