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Asia equities positive after S&P 500 record high

Wednesday 05:05 GMT

Overview

Major stock markets across Asia were mostly positive, buoyed by a record high for the S&P 500 in the US and by stronger prices for base metals supporting materials stocks.

Hot topic

The Australian dollar was the big loser among Asian currencies, down 0.5 per cent at $0.7541 against its US counterpart after inflation data for the December quarter fell short of economists’ expectations.

The headline consumer price index eased to 0.5 per cent quarter-on-quarter in the three months to December 31, while the yearly pace of inflation in Australia, as well as underlying measures of prices, remained subdued and below the central bank’s target range.

Forex

The Mexican peso weakened as much as 0.3 per cent to 21.5706 per dollar after US President Donald Trump tweeted that Wednesday would be a “big day” for national security, adding that “Among many other things, we will build the wall!”

The US dollar index — a gauge of the currency against a weighted basket of peers — was down 0.2 per cent at 100.2 in Asia, giving up nearly all of Tuesday’s gains.

The yen was up 0.2 per cent at ¥113.59 per dollar, boosted by data showing Japanese exports rose 5.4 per cent year-on-year in December, ending 14 months of decline.

The pound steadied and edged up 0.1 per cent to $1.253 after the UK’s Supreme Court ruled on Tuesday that the government must hold a parliamentary vote before triggering the process to exit the EU.

Equities

Japan’s Topix was up 0.9 per cent, while Australia’s S&P/ASX 200 rose 0.4 per cent as commodity stocks rallied.

Takata jumped 18 per cent in Tokyo after the troubled airbag maker said it wanted to avoid restructuring through a court-led bankruptcy because it would likely disrupt supply of parts.

BHP cut its guidance for copper production in the 2017 financial year, owing to power outages at one of its Australian mines. Nevertheless, shares climbed 3.5 per cent in Sydney, while stablemate Rio Tinto gained 3.6 per cent after announcing late on Tuesday that it would sell most of its coal business to China’s Yanzhou Coal for $2.45bn.

Hong Kong’s Hang Seng gained 0.2 per cent while on the mainland, China’s Shanghai Composite added 0.2 per cent.

Commodities

Copper rose to its highest point since early December to close at $5,943 a tonne on the London Metal Exchange on Tuesday. Other base metals also advanced.

Gold was down 0.3 per cent at $1,205.38 an ounce on Wednesday after slipping 0.8 per cent in the previous session.

Brent crude, the international oil benchmark, was down 0.2 per cent at $55.33 a barrel while West Texas Intermediate lost 0.3 per cent at $53.01.

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