- Asian Stocks Extend Global Rally; Yen, Gold Weaken
Asian equities extended a global rally as Chinese shares climbed after a selloff and North Korean artillery drills did little to ruffle markets. The yen weakened with gold.
Stocks in Japan and Hong Kong led gains after the MSCI All-Country World Index closed at a record and European shares surged to a 20-month high in the wake of French elections. Volatility continued to melt away as Shanghai stocks climbed from a three-month low on speculation concerns of a regulatory crackdown were overdone. The dollar rose against most major peers, while Treasuries maintained losses. Australia and New Zealand are closed Tuesday for Anzac Day.
Markets jumped Monday as Emmanuel Macron advanced as the favorite in the presidential runoff, easing concerns that France will leave the euro currency bloc. With worries over China and North Korea also in check for the moment, traders are turning their attention to a raft of other potential market-moving events, including corporate earnings and U.S. President Donald Trump’s agenda for the world’s largest economy.
“The uplift in risk appetite had been the result of a single event, but this week carries with itself a multitude of factors to look out for,” said Jingyi Pan, a market strategist in Singapore at IG Asia Pte Ltd. “The second half of the week certainly brings President Donald Trump back to the stage as he presents both opportunities, in the form of his tax package, and risk, should his push for the border wall drive the U.S. government to a shutdown.”
Trump will call for cutting taxes for individuals and lowering the corporate rate to 15 percent when he unveils his plan Wednesday, according to a White House official. At the same time, the administration appeared ready to go to the mat for its planned Mexican border wall in this week’s must-pass spending bill, setting up a clash with Democrats that may make a government shutdown at week’s end more likely.
While investors shrugged off North Korea’s largest-ever live-firing drill to mark the 85th anniversary of the Korean People’s Army, the situation remains tense. Trump warned of imminent action to contain North Korea’s nuclear threats, while Chinese President Xi Jinping called for restraint in a phone call with the U.S. president.