China Stocks Gain, Dollar Declines

China’s equities led gains as property stocks soared and a gauge of the nation’s manufacturing strength beat expectations. The dollar slid following its worst year in more than a decade, while gold advanced.

An index of Chinese H shares headed for a 2 1/2-year high in Hong Kong, while the Hang Seng Index and stocks on the mainland also rose. Developers were the biggest gainers, boosted by optimism on sales. The MSCI Asia Pacific Index climbed to a record, though markets in Tokyo remain closed until Thursday for Japanese holidays, and New Zealand was also shut Tuesday. The greenback weakened against almost all major currencies, while gold climbed for an eighth day and bitcoin extended Monday’s losses.

Global stocks last year posted their best performance since 2009, fueled by a synchronous global expansion and a go-slow approach toward monetary-stimulus withdrawal in major economies. That proved to be a winning recipe for equities and a loser for the greenback. U.S. stocks pared gains on the last day of trading, however, with the bulk of losses coming toward the close. S&P 500 futures were up 0.2 percent Tuesday.

The China Caixin manufacturing purchasing manager’s index showed a December reading of 51.5, beating the expected 50.7 and up from 50.8 the previous month. A slew of other manufacturing PMIs from around the region showed Taiwan’s at its highest since at least 2015, while the Philippines remained in expansion and Indonesia and Malaysia contracted. Singapore reported fourth-quarter economic growth of 3.1 percent, beating estimates.

Stocks

· The MSCI Asia Pacific Index climbed 0.6 percent as of 3:02 p.m. in Hong Kong, after surging 29 percent to a record high in 2017.

· The Hang Seng China Enterprises Index jumped 3 percent, the most since November, and the Hang Seng Index was up 1.9 percent, also the most since November.

· Korea’s Kospi index added 0.5 percent, while Australia’s S&P/ASX 200 Index slipped 0.1 percent.

Currencies

· The Bloomberg dollar index was down 0.2 percent, falling for a fifth-straight session. The euro rose 0.1 percent to $1.2024, while the British pound gained 0.2 percent to $1.3532.

· The onshore yuan rose as much as 0.2 percent to its strongest since Sept. 8, while the South Korean won touched the highest since 2014 and Taiwan’s currency, which is at a four-year high, extended gains.

· The Aussie rose 0.5 percent to 78.41 U.S. cents and the New Zealand dollar strengthened 0.3 percent to 71.23 U.S. cents, set for a 10th session of gains.

· The yen pared losses to trade little changed at 112.65 per dollar

Bitcoin slid to $13,424, down 6.2 percent since Dec. 29.

Bonds

· The yield on 10-year Australian bonds rose 2 basis points to 2.69 percent.

· Futures on 10-year Treasuries slipped 2/32 to 123 31/32, with cash trading closed in Asia due to holidays in Tokyo.

Commodities

· West Texas Intermediate crude rose 0.4 percent to $60.65 a barrel.

· Gold climbed 0.5 percent to $1,309.73 an ounce, the highest since September.

Industrial metals were mostly lower, led by nickel.

Source: Bloomberg

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