Asia markets were largely positive in morning trade on Monday after the S&P 500 and Nasdaq closed at record highs on Friday following comments by the U.S. Federal Reserve Chairman Jerome Powell. This also follows an announcement by China’s central bank regarding the yuan’s daily midpoint the same day.
Japan’s Nikkei 225 was in positive territory in early trade, up by 0.92 percent with almost all sectors seeing gains.
In Australia, the ASX 200 reversed its earlier losses to trade largely flat, with the heavily weighted financials sector down by 0.39 percent. South Korea’s Kospi traded up by 0.19 percent.
The Greater China markets gained in early hours trade. Hong Kong’s Hang Seng index was up by 1.17 percent as all of its major sectors rose, with materials and services up by around 1.9 percent.
The Shanghai composite traded 0.77 percent up while the Shenzhen composite was higher by 0.893 percent.
Wall Street ended the last trading week in positive territory. The S&P 500 rose 0.6 percent to close at 2,874.69 while the Nasdaq Composite climbed 0.9 percent to close at 7,975.98, a record high close for both indexes. The Dow Jones Industrial Average was up by 133.37 points to close at 25,790.35.
Last Friday, Powell delivered a speech at the Jackson Hole Symposium in Wyoming, where leading central bankers met to discuss the future of monetary policy. He said “further, gradual” rate hikes were likely in the future, noting the economy is “strong” and able to withstand tighter monetary policy.
Powell’s comments came hours after the People’s Bank of China announced that it was tweaking its methodology for the fixing of the yuan’s daily midpoint in an effort to stabilize the currency market.
In a morning note, Ray Attrill, head of foreign exchange strategy at National Australia Bank, said the “combined impact” of the dollar’s weakness following Powell’s speech and yuan strength after the China’s central bank’s announcement will likely be “dominant” as early week influences.
The U.S. dollar index, which tracks the greenback against a basket of currencies, traded at 95.111 at 9:52 a.m. HK/SIN. The Japanese yen traded against the dollar at 111.23 while the Australian dollar was at $0.7325.
Here’s a look at the economic data ahead:
- Hong Kong – July trade at 4:30 p.m. HK/SIN
CNBC’s Fred Imbert and Reuters contributed to this report.
