ASIA MARKETS: Asian Markets Get A Lift From Rally In Tech Stocks

By Ese ErherieneFeaturesDow Jones Newswires

Hang Seng hits 21-month high, Kospi nears intraday record

Stocks in Asia broadly rose Tuesday, with tech firms getting a shot in the arm from strong earnings from their U.S. counterparts overnight.

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Additionally, investors sought to reposition themselves as many local markets returned from the Labor Day holiday. In Japan, Tuesday was the last trading day of the week before the Golden Week holiday.

Still, there was a note of caution ahead of a Federal Reserve two-day meeting starting later in the day, a key U.S. jobs report on Friday, and the final round of the French presidential election on Sunday.

"The market is a little bit undecided about what's going to happen," said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets. He doesn't see the Fed moving on interest rates before the July meeting, but still expects three increases this year.

Japan's Nikkei Stock Average rose 0.7% as the yen softened, while Korea's Kospi rose 0.7%--after earlier just missing the intraday high reached in 2011--as tech giants Samsung (005930.SE) and LG (066570.SE) climbed 0.6% and 1.9%, respectively

The Nasdaq Composite set another record closing high overnight, ahead of Apple's (AAPL) quarterly report later Tuesday.

Taiwan tech stocks, which have been rising for months amid hopes of strong demand from Apple, rose 1.3%, according to the Taiex technology subindex. The Taiex overall gained 0.7%, moving back toward what would be 17-year highs.

In Hong Kong, the Hang Seng Index hit a 21-month high with a 0.3% gain, getting a lift from another strong month in gambling-revenue growth from Macau. Most of the operators there have stocks listed in Hong Kong.

But earnings were a drag in Australia. The S&P/ASX 200 fell 0.1% as large banks--heavily weighted in the index--sank under the weight of weaker-than-expected results from ANZ (ANZ.AU) , which dropped 2.1%. Fiscal first-half results from the other banks are due in the next few days.

Manufacturing data from China is also pressuring upbeat sentiment. The purchasing managers' index fell to a seven-month low ( in April, causing some fresh worry about whether that economy's start-of-year strength can be maintained. The Shanghai Composite fell 0.4% and the Shenzhen index ended fractionally lower.

A recent wave of financial-regulation tightening in China has triggered tighter interbank liquidity, unwinding of investment positions and market jitters visible in heavy stock selling at points over the past several weeks.

"We expect regulatory tightening to continue in the coming quarters, until China's growth momentum weakens much more or earlier than the government's expectation," said UBS.

More broadly, as President Donald Trump's administration ended its first 100 days, market participants continued to deliberate what the Republican president will mean for markets.

Dave Lafferty, chief U.S. market strategist of Natixis Global Asset Management, said investors should think like lion tamers.

"Perhaps candidate Trump is starting the natural transition to President Trump. Maybe. But investors should remember what Trump is: an easily agitated political novice with an itchy Twitter finger. Some lions can be trained to obey and even learn new tricks. But that doesn't change the nature of what a lion is: an inherently unpredictable animal."

(END) Dow Jones Newswires

May 02, 2017 06:31 ET (10:31 GMT)