Asia stocks poised to extend gains on US tax optimism

Traders working on the floor of the New York Stock Exchange shortly after the opening bell in New York. — Reuters pic
Traders working on the floor of the New York Stock Exchange shortly after the opening bell in New York. — Reuters pic

SEATTLE, Dec 19 ­— Asian stocks are poised to climb yesterday as optimism that US legislators are on the brink of passing sweeping tax cuts continues to grow.

Australian equities are already in the green and futures for stock markets in Tokyo and Hong Kong point to advances after US shares surged to fresh records. The yen gave back gains late in the US session yesterday, even as the dollar slid against most of its G-10 peers. South Africa’s rand surged as much as 4.4 per cent as Cyril Ramaphosa was elected the next leader of the ruling African National Congress party. Long-dated Treasuries sold off sharply as the curve steepened.

Republican Senator Susan Collins of Maine said she’ll back the GOP tax bill, virtually ensuring her party has the numbers necessary to pass the legislation. The House is scheduled to vote today on the tax bill following a floor debate that morning. It then goes to the Senate, where Republican leaders intend to bring it up as soon as they get it.

Across the Atlantic, the Stoxx Europe 600 Index climbed the most in about five months as real estate, automakers and technology stocks led gains. Sterling advanced as UK Prime Minister Theresa May addressed parliament about her plans for Brexit. The euro strengthened after two days of declines. Bitcoin is hovering above US$18,000 (RM73,467) after futures debuted yesterday on the CME Group Inc’s venue, the world’s biggest exchange, giving the cryptocurrency further cachet and access to mainstream investors.

Here are some scheduled key events for Friday:

The Reserve Bank of Australia’s December meeting minutes are due out, while Japan gives an update on November machine tool orders.

And these are the main moves in markets:

Stocks

Futures on the S&P 500 Index were up less than 0.1 per cent as of 8 am in Tokyo. The main gauge rose 0.5 per cent to a record 2,690.16. Australia’s S&P/ASX 200 Index was up 0.4 per cent. Futures on Japan’s Nikkei 225 Stock Average climbed 0.3 per cent. Futures on Hong Kong’s Hang Seng Index rallied 0.5 per cent.

Currencies

The Bloomberg dollar index clawed back losses late in the session, closing down 0.2 per cent yesterday. The euro rallied 0.3 per cent yesterday and was recently at US$1.1782. The pound rose 0.5 per cent yesterday, and was trading at US$1.3383. The yen was little changed at 112.55 per dollar yesterday.

Bonds

The yield on 10-year Treasuries climbed four basis points yesterday, to 2.39 per cent. Australia’s 10-year yield rose about five basis points in Tuesday trading, to 2.58 per cent.

Commodities

West Texas Intermediate crude was up 0.2 per cent to US$57.25 a barrel after sliding 0.2 per cent yesterday. Gold rallied 0.5 per cent yesterday, and was at US$1,261.59 an ounce early today. — Bloomberg

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