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Asia bourses rise as Wall Street scales new peaks

Monday 2.15am GMT

Overview

Asian stocks were on the rise, buoyed by record highs for Wall Street on Friday and a broadly encouraging US employment report.

Hot topic

Investors were keeping a cautious eye on China’s currency market, although the renminbi has softened since Friday and last week’s burst of strength.

The renminbi was 0.1 per cent weaker at Rmb6.9325 per dollar, as the People’s Bank of China fixed the midpoint for the currency’s daily trading range versus the dollar 0.9 per cent weaker. The fix reversed Friday’s rise, which was the biggest since the currency was depegged from the US dollar in July 2005.

Data over the weekend showed China’s foreign exchange reserves declined in December, albeit at a slower pace than in previous months.

Equities

Hong Kong’s Hang Seng was up 0.2 per cent, while in China the Shanghai Composite was up 0.1 per cent and the technology-focused Shenzhen Composite was down 0.2 per cent. Markets in Japan were closed for a public holiday.

Australia’s S&P/ASX 200 climbed 1.2 per cent, as bank stocks offset weakness in commodity stocks. Fortescue Metals was down more than 3 per cent and Rio Tinto fell 0.8 per cent after the government forecaster said the high iron ore prices in 2016 that had been driven by Chinese demand were not expected to last this year. BHP Billiton overcame early weakness to be 0.4 per cent higher.

On Friday the Dow Jones Industrial Average traded to within a whisker of the 20,000-point milestone before pulling back, closing with a gain of 0.3 per cent at a record high 19,963.8. The S&P 500 rose 0.4 per cent to a record of 2,277.

Forex

Any concerns about the outlook for the price of iron ore, Australia’s biggest export, were not showing up in currency markets, where the Australian dollar was up 0.3 per cent at $0.7322. Data showed building approvals in November fell from the same month a year earlier, but the reading beat economists’ expectations.

The US dollar index was flat at 102.21, having gained 0.7 per cent on Friday after data showed that non-farm payrolls had risen by 156,000 jobs in December, which though fewer than expected was offset by upward revisions to the previous two months’ figures.

The Japanese yen was down 0.2 per cent at ¥‎117.25 per dollar.

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