Hang Seng on track for best monthly performance since 2007
Continue Reading Below
Equity markets in Asia were broadly higher Thursday following robust U.S. economic data overnight, with stocks in Japan leading the pack thanks to a stronger dollar.
The Nikkei Stock Average was up 0.8%, after weakening in 14 of the past 19 trading sessions, while Australia's S&P/ASX 200 rose 0.6%. Still, both benchmarks -- two of the biggest underperformers in the region this year -- are set to fall for the month of August.
Driving Japanese equities were gains for the U.S. dollar, which recouped some of its losses earlier in the week, after the U.S. reported its fastest pace of economic growth in more than two years. The economy in the second quarter grew 3.0% compared with the same period a year ago, beating market expectations.
"We are looking at a recovery in the global economy along with stabilization in China," said Joanne Goh, regional equity strategist at DBS Group in Singapore. As long as the U.S. economy continues to recover, it will be supportive of the reflation trade and recovery in Asia, she said.
Elsewhere in the region, Singapore's Straits Times Index was up 0.5%, reaching its highest level in about two weeks -- despite losing 1.4% so far this month. Taiwan's Taiex was up 0.1%.
Continue Reading Below
Meanwhile, an official gauge of China's factory activity released Thursday showed a rise in August, reflecting continued firmness in the world's second-largest economy.
Still, the Shanghai Composite Index was flat after opening lower, dragged by disappointing data in the nonmanufacturing sector, as slower growth in Chinese property investment curbed construction activity.
"The key to economic growth is still the property market. So far, its slowdown hasn't yet affected the manufacturing sector. But if it continues, it would weigh on economic growth," said Liu Xuezhi, an economist at the Bank of Communications.
In Hong Kong, the Hang Seng Index succumbed to profit-taking after it rose to a 27-month closing high Wednesday. The HSI was down 0.4%, with shares of Chinese banks leading losses.
Hong Kong-listed shares of China Construction Bank (0939.HK) were down 2%, and shares of Industrial and Commercial Bank (601398.SH) were down 2.3%.
But even factoring in Thursday's declines, the Hang Seng Index is still on track for an eighth-straight month of gains, a performance not seen since 2007.
In currencies, the dollar was supported by strong U.S. data and the easing of geopolitical tensions, with the WSJ Dollar Index, a broad measure of the greenback, rising 0.4% overnight to 85.93. It remained near those levels in Asian trade.
The Korean won was largely flat as the Bank of Korea kept its base rate unchanged at 1.25%, with the dollar fetching 1124.10 won in morning trade.
(END) Dow Jones Newswires
August 30, 2017 23:08 ET (03:08 GMT)