Asian equities follow Wall Street gently higher

Wall Street rises on technical stocks

The S&P 500 and Nasdaq made new record highs overnight, led by big-tech naturally, and strong quarterly results from big-box retailers. When all was said and done though, the gains were modest in scope, with both indices creeping into new highs, not exploding higher. Part of that tentativeness may be the fall in the US dollar, and the continuing stimulus standoff on Capitol Hill, with investors worried that Q2 might end up being the best of a bad bunch.

The S&P 500 rose 0.23%, the Nasdaq rose 0.73%, led by gains in Amazon, but the Dow Jones edged lower by 0.24%, weighed down by a fall in banking stocks. Despite the buy everything, FOMO exuberance sweeping the markets, further gains from here will probably be more of a slow grind higher than a sprint. Nevertheless, the foundations of the most counterintuitive rally in history remain firmly in place.

Hong Kong is closed until midday due to a typhoon, but elsewhere, Asian markets have mostly followed Wall Street higher in a modest fashion. The Nikkei 225 has climbed 0.25%, with the Kospi up 0.55%. Potential trade tensions are weighing on Chinese stocks initially after more Trump rhetoric overnight. The Shanghai Composite and CSI 300 are down 0.40%.

Across Asia, Singapore, Jakarta and Kuala Lumpur are flat. Taiwan is up 0.25%, with Australia’s All Ordinaries and ASX 200 both 0.90% higher. Trade concerns between the US and China appear to be hanging more heavily with Asia, as is the general appreciation of their currencies overnight versus the US dollar.

The fall in the US dollar is likely to mute gains in Europe this afternoon, at least initially. However, the search for yield and hopes of a global recovery should ensure that European and Asian markets continue to follow their Wall Street counterparts to some extent.

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