Major Asian stock indexes nudged higher Monday while the dollar rebounded as a U.S. job report showed strong wage gains, giving more ammunition to U.S. policymakers planning further rate rises.
Hong Kong’s benchmark Hang Seng index advanced 0.2 percent to 22,547.82 while the Shanghai Composite in mainland China rose 0.4 percent to 3,167.98. South Korea’s Kospi edged 0.1 percent higher to 2,051.39 while Australia’s S&P/ASX 200 jumped 0.9 percent to 5,807.40. Trading in Japan was closed for a holiday. Benchmarks in Southeast Asia were mostly lower.
Friday’s Labor Department report painted a mixed picture of U.S. employment. It showed that companies added a solid but slightly disappointing 156,000 jobs in December. On the other hand, hourly pay jumped 2.9 percent from the year before, which was the biggest monthly increase in seven years. For 2016 overall, job growth in the world’s biggest economy remained steady in 2016, although the pace was slower than in 2015.
“U.S. markets have closed off the first week of the year with a steady set of gains across sectors, and the same can be seen in most Asian markets,” said Jingyi Pan, market strategist at IG in Singapore. “With improving indicators in the U.S. and across Asia, we could see a second set of gains this week in this data-filled week.”
Potential market-moving events this week include the release of China inflation and Japanese consumer confidence figures on Tuesday. On Wednesday, President-elect Donald Trump has scheduled a long-awaited news conference on his global business empire, though Asian markets won’t be able to react until the following day. China trade data and U.S. retail sales numbers are due at the end of the week.
Official data showed that China’s foreign exchange reserves contracted in December for the sixth straight month, falling by $41 billion to just over $3 trillion, according to the People’s Bank of China. The central bank said Saturday its effort to stabilize the yuan was a major reason for the drop in forex reserves. The latest figures underline Beijing’s willingness to use its huge stockpile of foreign currency to stabilize the yuan, which has been declining as residents and companies send more money overseas amid flagging confidence in China’s economy.
Most major U.S. benchmarks crept higher, finishing the week with a big gain as investors remained optimistic about the U.S. economy. The Dow Jones industrial average flirted with the 20,000-level but finished up 0.3 percent at 19,963.80. The S&P 500 rose 0.4 percent to 2,276.98. The Nasdaq composite jumped 0.6 percent to 5,521.06. The small-cap Russell 2000 index slid 0.3 percent to 1,367.28.
The dollar rose to 117.46 yen from 116.93 yen in late trading Friday. The euro eased to $1.0527 from $1.0533.
U.S. benchmark crude oil slipped 30 cents to $53.69 a barrel in electronic trading in New York Mercantile Exchange. The contact rose 23 cents to close at $53.99 a barrel on Friday. Brent crude, which is used to price oil sold internationally, lost 26 cents to $56.84 a barrel in London.