Asian markets up following record close on Wall Street

Hong Kong. Asian markets yesterday built on last week’s gains following another record close on Wall Street, while the euro edged up on news that French President Emmanuel Macron’s party had secured a healthy majority in National Assembly elections.

The Dow in New York closed at a fresh all-time high Friday thanks to a bounce in energy stocks, providing a positive lead for Asia, and a weaker yen helped Tokyo rally.

The dollar climbed above 111 yen yesterday after Japan posted a surprise trade deficit for May. The Nikkei ended 0.6 percent higher, although troubled airbag maker Takata plunged 16.5 per cent on reports it plans to file for bankruptcy and sell its assets to a US firm.

“With stocks on an uptrend for quite some time, and the global economy seen to keep expanding, the general risk-positive sentiment is continuing,” Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo, told Bloomberg News.

“In that regard, the yen is bound to come under selling pressure.” Hong Kong added 1.2 per cent and Shanghai finished up 0.7 per cent, with Chinese traders waiting to see if index compiler MSCI decides to include the mainland index in its global benchmarks list.

Seoul gained 0.4 per cent and Sydney added 0.5 per cent, while Wellington, Taipei and Manila were also sharply higher.

In early European trade London added 0.7 per cent, while Paris and Frankfurt each rose 0.8 per cent.

With few drivers for business this week, eyes will be on the start of talks between Britain and the European Union on its extraction from the economic bloc.

The ruling Conservative party lost its parliamentary majority in elections this month, weakening the government’s hand.

“How these negotiations evolve will likely hold the near-term fate for the pound,” said Stephen Innes, a senior trader at Oanda.

The pound, which tumbled in response to the election result, continues to struggle around two-month lows against the dollar.

The euro edged up to sit about $1.12 after Macron’s year-old Republique en Marche (Republic on the Move) and its allies won 351 seats in the 577-seat National Assembly, giving the president a strong mandate to enact business-friendly reforms.

However the currency’s gains were tempered by the fact that the party did not secure the forecast landslide.

On oil markets prices dipped on lingering glut concerns as US companies’ rising production offsets big output cuts agreed by Opec and Russia. (AFP)