ASIA MARKETS: Nikkei Shoots Above 20,000 Mark As Asian Markets Soar

By Lucy Craymer Features Dow Jones Newswires

Korea, Taiwan indexes also on pace for multiyear closing highs

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Japan's benchmark index zoomed above 20,000 points on Friday, the first time in 18 months, leading broad equity gains across the region following another record close on Wall Street overnight.

The Nikkei Stock Average was the region's best performer for the second straight session, gaining 1.4% to 20138, lifted by a strengthening U.S. dollar against the yen, which benefits the nation's exporters. The U.S. dollar was up 0.5% against the yen compared with Thursday's close. Gains were widening early Friday.

"Earnings are good in Japan, Europe and America. You've got very predictable central bank policy: they don't want to shock," said Chris Weston, an analyst at IG Markets in Australia.

"You've got very low implied volatility and very low realized volatility and when you aggregate that all together," it is a strong picture, he said.

Among key outperformers in Japan, Mitsubishi Electric (6503.TO) was up 5.4%, Yamaha Motor (7272.TO) gained 4.8% and retailer Fast Retailing (9983.TO) added 4.1%.

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Elsewhere, Korea's Kospi and Taiwan's Taiex were also on target to reach multiyear closing highs when they finish trading on Friday. The indexes were respectively up 0.9% and 0.5%. The Kospi benefited from an increase in local investor sentiment after South Korea's first-quarter gross domestic product was revised higher.

Overnight, a rally in U.S. stocks saw all three major indexes closing at fresh highs. Stocks have broadly edged higher in recent sessions on relatively low trading volumes after the end of the first-quarter earnings season, leaving investors searching for fresh catalysts.

"The thing about that U.S. lead [overnight] is that it was a strong move, which contrasted what we've seen for much of the preceding week that was limp and drifting without much conviction," said Ric Spooner, chief market analyst for Australia at CMC Markets.

Mainland China was the main outlier for stocks in Asia on Friday, as markets there have been under pressure after a private gauge of Chinese manufacturing activity released Thursday showed a contraction in May, the first contraction in nearly a year. The Shenzhen and Shanghai Composite indexes were down 0.7% and 0.4%, respectively. Hong Kong's Hang Seng Index , however, was recently 0.4% higher.

In the Philippines, the PSEi Index was up 0.8% early in the trading session. The market has digested news overnight that a gunman attacked a major hotel-and-casino resort in the capital.

Local police said the man killed himself by setting himself on fire, in a dramatic end to a series of events that began just after midnight and sparked concerns that a terrorist attack was under way. About 34 people were reportedly killed by smoke from the fire that was set in a hotel room.

In other markets, oil remained under pressure with prices down nearly 1% in early Asia trading as investors remain focused on rising output in the U.S. and Libya.

"Supply-side concern is still very high," said Commonwealth Bank of Australia commodities strategist Vivek Dhar.

(END) Dow Jones Newswires

June 01, 2017 23:47 ET (03:47 GMT)