Asia Markets

Asian shares notch gains as the dollar slips; China markets shine

Key Points
  • Asian shares closed higher on Monday after U.S. stock indexes rallied.
  • Markets await Federal Reserve Chair Jerome Powell's testimony before Congress for clues on the central bank's interest rate hike path.
  • China markets led gains in the region, with the Shanghai composite closing higher by 1.25 percent and the start-up board Chinext index rising 3.12 percent.
  • The dollar slipped against a basket of currencies.

Asian markets closed higher on Monday, tracking gains seen on Wall Street as U.S. bond yields receded from recent four-year highs. Meanwhile, the dollar slipped against a basket of currencies and investors awaited a testimony from the new Federal Reserve chair.

Japan's advanced 260.85 points, or 1.19 percent, after recording gains of more than 300 points earlier in the day. Technology stocks, financials and automakers traded higher on the day. Among index heavyweights, SoftBank Group jumped 1.73 percent and Fast Retailing rose 1.52 percent by the end of the day.

Elsewhere, South Korea's benchmark Kospi rose 0.25 percent to end at 2,457.65.

Amid the mixed tech sector, heavyweight Samsung Electronics rose 0.34 percent by the end of the day after unveiling its new Galaxy S9 model on Sunday. Shares of chipmaker SK Hynix advanced 0.26 percent.

Down Under, the S&P/ASX 200 edged up 0.71 percent to finish the day at 6,042.2 as the index reclaimed the 6,000 level. The heavily weighted financials sub-index rose 1.16 percent, making it the best-performing sector as all of Australia's "Big Four" banks closed the day with gains. Gains were also seen in the energy sector, which rose 0.84 percent.

The positive sentiment was also seen in Hong Kong, with the higher by 0.73 percent by 3:24 p.m. HK/SIN.

Large cap mainland property stocks listed in Hong Kong traded in negative territory following the weekend release of new home price data out of China: Sunac declined 3.15 percent, China Evergrande lost 1.03 percent and Country Garden edged down 0.93 percent by 3:29 p.m. HK/SIN. Data had shown prices rose 5 percent in January compared to one year ago.

Still, the property sector traded higher by 1.68 percent on the whole ahead of the market close.

On the mainland, the climbed 1.25 percent to close at 3,330.25 and the Shenzhen composite jumped 2.25 percent to end at 1,815.02. The technology sector and telecommunication sectors were the best performers on the blue-chip CSI 300 index, which finished the day higher by 1.17 percent.

Meanwhile, the start-up board Chinext index popped 3.12 percent on the day. The rise came after weekend news that regulators had suggested postponing the date for policymakers to approve rules for registration-based initial public offering, according to Reuters.

Gains in the region tracked the rally seen on Wall Street on Friday, which saw U.S. stock indexes notching gains of more than 1 percent. The closed higher by 1.6 percent and the Dow Jones industrial average rose 1.39 percent in the last session.

The Dow and S&P 500 finished the week with gains of 0.4 percent and 0.6 percent, respectively.

Powell testimony ahead

Meanwhile, the Federal Reserve's monetary policy report released on Friday indicated "gradual adjustments" in policy ahead, given how policymakers saw the U.S. economy past full employment.

The release of the report came ahead of Fed Chair Jerome Powell's testimony before Congress on Tuesday. Markets are awaiting his comments for clues on the central bank's interest rate hike path.

"Assuming that Powell does not rock the boat and reiterates a gradual tightening path, this may clear the way for markets to continue on its risk-on mode in the interim," said OCBC Treasury Research in a morning note.

In individual stocks, Geely soared 7.11 percent in Hong Kong by 3:23 p.m. HK/SIN following news last Friday that its chairman had accumulated a 9.7 percent stake worth $9 billion in German automaker Daimler.

Meanwhile, shares in mainland China with the word "emperor" in their names got a boost after the Communist Party moved to drop a two-term limit on the country's presidency, Reuters first reported. One of those stocks, Shenzhen Emperor Technology, closed up 7.36 percent.

Elsewhere, Australia's BlueScope Steel rose 2.26 percent after the company reported first-half net profit after tax rose 23 percent to come in at 441.2 million Australian dollars ($345.8 million).

Shares of QBE Insurance Group closed down 3.26 percent after it posted a net loss of $1.25 billion for the year ending Dec. 31, below the $844 million profit seen one year ago. After taxes, cash loss for the year came in at $258 million.

In currencies, the dollar index, which tracks the greenback against a basket of six currencies, slipped to trade at 89.658 at 2:44 p.m. HK/SIN, giving up some of its gains made last week.

Against the yen, the dollar softened to trade at 106.51.

Moves in the dollar came as yields on the 10-year U.S. Treasury note retreated further from a recent four-year high. The 10-year yield last stood at 2.855 percent.

On the commodities front, oil prices edged up after touching two-week highs in the previous session. U.S. crude futures rose 0.35 percent to trade at $63.77 per barrel and Brent crude futures added 0.18 percent to trade at $67.43.