Dhaka, Bangladesh
Global stocks climb as concerns ease over North Korea, Irma

Global stocks climb as concerns ease over North Korea, Irma

NEW YORK, Sept 12: Global stocks rallied Tuesday on receding worries about North Korea and Hurricane Irma, which caused less damage to the US than feared, reports AFP. The UN Security Council voted unanimously Monday to step up sanctions against North Korea, having won the crucial support of Russia and China, while the US held out hope for a peaceful resolution to the crisis. The move provided a much-needed boost after Pyongyang’s September 3 nuclear test hammered markets last week and sent investors fleeing for the safe havens of gold and the yen. Despite widespread speculation, the North did not mark its foundation day Saturday with another missile launch. This helped lift all three main New York indexes more than one percent Monday, with the S&P 500 at a new record. “What road seems to be travelled now is one of negotiation rather than provocation. There has been a reversal of the tactics over the last week and I think that’s what the markets are seeing,” Jefferies chief global strategist Sean Darby told Bloomberg Television. Most of Asia followed New York’s example, with a sharply weaker yen a plus for Japan’s exporters. The dollar was at 109.56 yen compared with the 10-month lows around 107.30 yen last week. Tokyo led gains across most Asian markets Tuesday, tracking a record on Wall Street as the North Korea crisis eased and dealers breathed a sigh of relief that Hurricane Irma caused less damage to Florida than feared. The benchmark Nikkei 225 index climbed 1.00 percent, or 195.65 points, to 19,741.42 by the break while the broader Topix index was up 0.83 percent, or 13.45 points, at 1,625.71. “Investors’ risk-off attitude receded as there was no worrisome development such as a further North Korean missile launch,” said Yoshihiro Ito, chief strategist at Okasan Online Securities. The dollar was almost flat against the yen, fetching 109.35 yen in early Asian trade, against 109.44 yen in New York. The rally in Tokyo followed a brisk performance by US shares Monday on relief that the damage caused by Hurricane Irma was not as bad as feared. The S&P 500 closed at a fresh record high and the Dow rose 1.2 percent to end back above 22,000. Less than two hours before the opening bell in Japan, the UN Security Council unanimously imposed new sanctions on North Korea, slapping a ban on textile exports and restricting shipments of oil products to punish Pyongyang for its sixth and largest nuclear test. Turning to individual share prices, Japan Post jumped 3.40 percent to 1,366 yen after the government said late Monday it would sell off another chunk of the country’s massive postal service in a share listing expected to raise about $12 billion. Blue-chip exporters were also in the green, with Toyota gaining 1.09 percent to 6,365 yen, rival Nissan rising 1.27 percent to 1,113.5 yen and game giant Nintendo up 2.67 percent at 37,660 yen. Banks were also higher reflecting rises in US long-term yields, with Mitsubishi UFJ advancing 1.75 percent to 672.8 yen and Sumitomo Mitsui Financial up 1.71 percent to 4,097 yen by the break.Shanghai added 0.1 percent and Sydney was 0.6 percent up. Seoul gained 0.3 percent while Taipei and Singapore were also higher. Manila was closed owing to flooding from a major storm. Hong Kong was slightly lower in the afternoon following strong gains over the previous two sessions, while Wellington was also down. In early European trade London rose 0.1 percent, Paris put on 0.3 percent and Frankfurt gained 0.5 percent. Analysts said that while Irma was still deadly, the fact that it struck the west coast of Florida instead of cutting through the spine of the state meant billions of dollars less damage. That provided extra support to the dollar, which also made some inroads against the euro as speculation swirled that some members of the European Central Bank favour a slow wind-down of its stimulus programme. The single currency was back below $1.20, having broken the marker last week for the first time since the start of January 2015. China’s yuan retreated for the first time in two weeks after the central bank relaxed capital controls put in place earlier this year to prevent a flight of cash from the country. The currency was at 6.5277 to the dollar, against 6.4436 late last week. That compares with levels close to 7.000 at the start of the year and indicates authorities may be looking to stop it appreciating too much too quickly. Eyes will now turn to the release of US inflation figures later in the week, which could provide some clues as to the Federal Reserve’s plans for raising interest rates again this year. A weak run of data in recent months has led dealers to lower their expectations for any more tightening. Greg McKenna, chief market strategist at AxiTrader, said there were hopes on trading floors that President Donald Trump’s decision to work with Democrats to lift the debt ceiling this month could provide hope for his economic agenda. “The new paradigm in Washington which might be emerging between President Trump and the Democrats might have rekindled hopes that the Trump agenda for the economy isn’t dead,” he added.

Share |