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Asia tech stocks bathe in Apple glow, dollar steadies

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Reuters SYDNEY
Last Updated : Aug 02 2017 | 8:57 AM IST

By Wayne Cole

SYDNEY (Reuters) - Asian stocks paused near decade-highs on Wednesday as strong earnings results from tech bellwether Apple rippled out to component makers in the region.

Shares in the world's most valuable company surged 6 percent after hours to a record of more than $159, taking its market capitalisation above $830 billion.

That should help carry the Dow through the 22,000 mark when trading resumes in New York. E-Mini futures for the Dow were up 0.2 percent in Asia trade.

The tech giant reported better-than-expected iPhone sales, revenue and earnings per share and signalled its upcoming 10th-anniversary phone is on schedule.

Among Apple suppliers, LG Innnotek jumped 9 percent and SK Hynix, the world's second-biggest memory chip maker, rose almost 3 percent. Murata Manufacturing firmed 4 percent and Taiyo Yuden 3.8 percent.

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The MSCI tech index for Asia rose 0.7 percent, bringing its gains for the year to almost 40 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan was steady, having hit its highest since late 2007. Japan's Nikkei rose 0.4 percent.

There was a note of caution over reports U.S. President Donald Trump was close to a decision on how to respond to what he considers China's unfair trade practices.

Tepid U.S. inflation along with political turmoil in Washington has lessened the risk of another Federal Reserve rate hike this year, lowering bond yields across the globe.

Improving data in other major economies has also served to push the greenback down nearly 11 percent from January peaks, benefiting commodities and emerging markets.

A swathe of manufacturing surveys (PMIs) out on Tuesday underlined how the improvement in activity had broadened out from the United States to Asia and Europe.

EBULLIENT MOOD

Alan Ruskin, head of G10 forex at Deutsche, noted the top five PMIs were all Northern European economies and every index in Europe was in expansionary territory above 50.

"That will do nothing to hurt ebullient global risk appetite," said Ruskin. "This phase of the risk rally is based on growth data, but even more on subdued inflation measures."

"The latter plays to a gradual Central Bank exit from extreme policy accommodation that should prolong the global growth cycle."

MSCI's gauge of stocks across the globe has scored its longest monthly winning streak in over a decade.

On Wall Street, the Dow ended Tuesday with gains of 0.33 percent, while the S&P 500 added 0.24 percent and the Nasdaq rose 0.23 percent.

In currency markets, the dollar edged away from deep lows though thanks mainly to positioning - bears are already so short of the currency that they are wary of selling even more.

The dollar index steadied at 93.116 after touching 92.777, the lowest since early May 2016. The euro stood at $1.1801, not far from a 2-1/2-year high of $1.1845 struck on Monday.

The dollar was flat on the yen at 110.55, having briefly fallen below 110 on Tuesday for the first time in more than six weeks.

Oil prices were under pressure again amid rising U.S. fuel inventories and as major world producers kept pumping, causing investors to worry that several weeks of steady gains had pushed the rally too far.

Brent crude eased 49 cents to $51.29 a barrel, while U.S. crude lost 48 cents to $48.68.

(Editing by Kim Coghill and Jacqueline Wong)

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First Published: Aug 02 2017 | 8:44 AM IST

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