Investors optimistic despite geopolitical worries
Stock markets across Asia were higher early Friday, catching an updraft from overnight gains in the U.S. as investors positioned themselves ahead of the start of the French presidential election.
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Markets were calm following a suspected terrorist attack in Paris overnight that left at least one police officer dead, three days before the election.
While it was still unclear which two of the four top candidates will qualify for the final runoff on May 7, polls indicate centrist candidate Emmanuel Macron as being currently favored to win, helping boost market confidence.
Japan's Nikkei Stock Average was up 0.8% in early trade, having opened at its highest level in a week. Australia's S&P/ASX 200 was up 0.6%, Korea's Kospi added 0.9% and Hong Kong's Hang Seng Index added 0.3%.
"With the French elections bearing down on markets, the bulls seem to be wrestling back some control here," said Chris Weston, chief market strategist at IG Group.
"Despite the prospect of real volatility on Monday, there is hope that all will be well," he said.
Though fears of a strong yen derailing Japan's exports persist, data Friday showed a rise in new export orders helping lift the Nikkei manufacturing purchasing managers index -- a key gauge of economic health -- to 52.8 in April, up from 52.4 in March.
Across the region, financial shares drove gains as U.S. Treasury Secretary Steven Mnuchin's comments regarding a looming tax proposal has raised prospects of fiscal stimulus in the U.S. Japan's Topix bank subindex added 1.2%, while Australia's financials subindex gained 0.7%.
Meanwhile, stocks that are sensitive to economic cycles also outperformed, with Japanese steelmaker JFE (5411.TO) and car maker Subaru (7270.TO) both up some 2%.
In Hong Kong, shares of cable television operator i-Cable (ICABY) slumped 13% to a six-week low in the wake of the struggling company's plan to sell 704 million Hong Kong dollars ($90.5 million) of stock at a steep discount.
The cable television operator 's parent, conglomerate Wharf, won't participate in the offering, paving the way for tycoon Henry Cheng and his Chow Tai Fook Enterprises to become i-Cable's biggest shareholder.
More broadly, analysts expect gains in the region to be capped until after Sunday's French election. Also, market participants will be watching for PMI data releases from the EU and the U.S. later in the global day.
In currencies, the yen was flat against the dollar, with the dollar likely to stay firm against the Japanese currency during Asia trade on Friday as geopolitical tensions recede, said Toshiyuki Umekawa, a senior vice president of Mizuho Bank.
"I don't think selling pressure will strengthen" ahead of the weekend, said Umekawa, who tips the dollar-yen pair to trade in a 109.00-109.80 range. The pair was last at 109.27.
Overnight in U.S. markets, the Dow Jones Industrial Average closed up 0.9%, with shares of banks and manufacturers among the biggest gainers. The S&P 500 rose 0.8% and the Nasdaq Composite added 0.9%.
(END) Dow Jones Newswires
April 20, 2017 23:27 ET (03:27 GMT)