Asian shares capped, though unsuspected US growth spurs Nikkei

Whereas Asian shares have been capped amid ongoing fears of enfeebled global growth, stronger than expected US job data growth has propelled Japanese equities to a near five-year high.

European stock markets incited the Asian cap, with financial spreadbetters anticipating London’s FTSE 100, Paris’s CAC-40 and Frankfurt’s DAX to open down as much as 0.3 percent. Tetsu Emori, commodities sales manager at Astmax Investments in Tokyo reported that: “The current fundamentals are very weak, with China slowing down and with US demand not so strong.”

US futures were down a comparatively softer 0.1 percent, after the S&P 500 Index closed at overnight record highs. “There is some profit-taking coming in after the sharp rise in prices we saw in the recent days,” said Emori. The boost to riskier assets herein signaling a sizeable return to profit taking, outlining a severe lack of confidence in broader economic prospects.

The predominant focus for Asian currency markets was the Reserve Bank of Australia’s policy meeting; a case in which the bank lowered its cash rate by 25 percent basis points, amounting to a record slump of 2.75 percent.

Markets had previously priced in a 50-50 chance of a rate cut, resulting in the Australian dollar having fallen to a two-month low of $1.0810; a figure to have somewhat aided Australian shares in offsetting earlier losses.

The ECB moreover contributed to the moderately positive outlook, stating that it was prepared to cut rates again if necessary.

“I think the markets are going to continue going higher, the S&P hit another record high yesterday, the DAX is getting closer,” so stated Neil Marsh, strategist at Newedge.
“From a very low base, everyone is fairly optimistic that things are going to improve and if they don’t, you’ve got the added backdrop from [ECB President Mario] Draghi that he’ll do whatever it takes to push the euro zone economy forwards.”

The region will presently be looking towards a slew of data pertaining to China’s trade, inflation and money supply, released on Wednesday, Thursday and Friday respectively.

“Post-nonfarm payroll euphoria has proved short lived and despite US markets grinding higher overnight, markets are now on the look out for their next reason to rally,” said Jonathan Sudaria, a trader at Capital Spreads.

With Japanese markets being closed on Friday and Monday due to bank holidays, the Nikkei stock average rocketed 3.7 percent to surmount 14,000 for the first time since June 2008. This rise being on account of Japan’s top export market demonstrating unforeseen signs of resilience.