Asia Markets

Asian markets soar, Nikkei rockets close to 7%

Asian markets open well into the green
Asian markets open well into the green

Asia markets soared on Thursday with the Nikkei jumping close to 7 percent, as traders reassessed the economic impact of Donald Trump's victory in the U.S. presidential election.

The ended up 6.72 percent, or 1,092.88 points, at 17,344.42, as the yen weakened against the dollar, trading at 105.42 as of 2:50 pm HK/SIN. The dollar/yen had plunged to 101 levels on Wednesday.

"U.S. yields surged higher on the back of expected increased fiscal spending by Trump. This has helped the dollar rally sharply against other currencies but especially the low yielding yen and the euro," Anthony Darvall, chief market strategist at easyMarkets, said in a note on Thursday.

"A weaker yen has helped propel Japanese stocks up...completely erasing yesterday's losses."

The Australian benchmark index closed up 3.34 percent, or 172.27 points, at 5,328.8. The ASX's strength was underpinned by its energy subindex, up 3.29 percent, and the materials subindex, up 5.75 percent. The gold subindex shed 4.82 percent.

New Zealand's NZX 50 ended up 1.04 percent, or 69.51 points, at 6,733.72. Before markets opened, the Reserve Bank of New Zealand cut rates by 25 basis points to a record low of 1.75 percent. The RBNZ statement warned that "numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly."

In South Korea, the Kospi closed up 2.26 percent, or 44.22 points, at 2,002.6, while Hong Kong's had surged 2.09 percent higher by 3:13 pm local time.

The closed up 1.36 percent, or 42.55 points, at 3,170.92, while the Shenzhen composite finished up 1.374 percent, or 28.42 points at 2,096.89.

The plunged to a fresh six-year low against the dollar on Thursday, tracking a broad rally in the greenback after Trump's surprise win.

The yuan fell to 6.7912 against the dollar as of 2:48 pm HK/SIN, down from its close at 6.7769 on Wednesday.

Chinese companies involved in One Belt, One Road (OBOR) a China-led initiative for a major infrastructure and trade framework, received a boost from a weaker yuan and Trump's win, Reuters reported.

China Communications Construction was up 6.86 percent, while Zoomlion Heavy industries shot up 4.62 percent and Sany Heavy added 3.11 percent.

Two sides to the Trump energy play
Two sides to the Trump energy play

, one of the initial winners of the U.S. election uncertainty, rose 0.74 percent at $1,287.20 an ounce. On Wednesday, gold prices had surged nearly 5 percent to $1,337.40.

During Asian trade, U.S. crude futures gained 0.51 percent to $45.49 a barrel, after settling at $45.27 in the U.S. Wednesday session, as Brent futures added 0.86 percent to $46.76.

"How long the Trump afterglow will last is a matter of conjecture. Less red tape and taxes should theoretically lead to higher oil production in the United States," said Jeffrey Halley, senior market analyst at Oanda, in a note on Thursday. "Not good news for OPEC and non-OPEC members trying to thrash out a production cut. Oil's post election afterglow may turn black gold to fool's gold as the street gets back to reality."

Crude oil futures recouped earlier losses of nearly 4 percent on Wednesday, as markets recovered from an initial shock of Trump's victory.

Later on Thursday, the Philippine central bank will announce its monetary policy decision.

Explaining the post-election market rally
Explaining the post-election market rally

On Wednesday, Asian shares, which traded as U.S. election poll results trickled in, tumbled as it became increasing apparent that Republican candidate was leading the race for the White House.

European stocks closed sharply higher, after opening with significant losses, while on Wall Street, U.S. stocks rose more than 1 percent, even though futures had plunged as the polls came in during the night in the U.S.

The ended up 1.4 percent at 18,589.69, while the S&P 500 closed up 1.11 percent at 2,136.26. The composite finished up 1.11 percent at 5,251.07.

"The rancor of the U.S. election campaign appeared to evaporate after conciliatory concession and acceptance speeches from the candidates," Michael McCarthy, chief market strategist at CMC Markets, said in a note on Thursday. "In one of the most extraordinary trading sessions ever, Dow futures went from more than 800 points deficit to close 247 points higher."

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