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Asia stock markets mostly higher after ECB’s QE tweak

Friday 06:00 GMT

Overview

Markets across Asia were mostly higher as investors reflected on record highs for Wall Street and the European Central Bank’s decision to tweak its asset purchase programme.

European bourses are expected to open little changed, with spreadbetters predicting the UK’s FTSE 100 will be flat at 6,932 and Germany’s Dax to add 7 points to 11,186. US index futures suggest the S&P 500 will gain another 2 points to 2,248, when trading gets underway later in New York.

Hot topic

At its final policy meeting for the year, the ECB on Thursday said it would continue to buy bonds under its quantitative easing programme beyond March 2017, but would slow purchases after March from €80bn a month to €60bn through the end of the year.

The central bank insisted this was not a “taper” but it resulted in a wild ride for the euro — which surged to a four-week intraday high of $1.0872 before finishing the session 1.3 per cent weaker at $1.0615 — and a sell-off in European government bonds. In Asia, the euro was 0.1 per cent weaker at $1.0607.

What to watch

Casino stocks have recovered some poise following a response from China’s UnionPay to a report by Hong Kong’s South China Morning Post that Macau was set to limit the amount of money its bank card holders can withdraw from ATMs in the territory, as Beijing steps up its fight against capital outflows.

Macau is the only place in China where casinos are legal. The move would mark the latest step in Beijing’s recently ramped-up efforts to limit capital fleeing the mainland.

Casino stocks in the US tumbled 10-12 per cent overnight as the news broke, and declines were initially echoed by Macau-exposed peers listed in Asia. But UnionPay’s response helped shares come off lows, with Crown Resorts down 4.9 cent in Sydney, while in Hong Kong, Galaxy Entertainment, Sands China and MGM China were down between 4 per cent and 5 per cent.

Equities

Japan’s Topix was up 0.8 per cent, while Australia’s S&P/ASX 200 gained 0.3 per cent. Hong Kong’s Hang Seng slipped 0.4 per cent under the weight of casino stocks, while China’s Shanghai Composite added 0.7 per cent.

That came after the S&P rose 0.2 per cent in New York to close at a fresh record high, alongside new peaks for the Dow Jones Industrial Average, Nasdaq Composite and small-cap Russell 2000. It was the first time this month the quartet had simultaneously notched record finishes, having done so for the first time since 1999 in late November.

Forex

Weakness in the euro overnight helped the US dollar index post its biggest one-day gain in almost a month.

The dollar index was 0.1 per cent firmer on Friday at 101.19, in turn putting some pressure on major currencies around Asia. The Japanese yen was down 0.3 per cent at ¥‎114.43 per dollar.

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