Asian shares hold near 3 week high

Asian markets held steady near three-week highs on Thursday, as investors were cautiously optimistic after upbeat trade data from China eased concerns over the global economy and helped take some of the sting off the recent emerging markets turmoil.

The new Federal Reserve Chair Janet Yellen's reassurance on U.S. monetary policy and economic outlooks also appear to have done enough for now to underpin risk appetite.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, having erased all of its losses since late January, sparked by fear over emerging markets. Japan's Nikkei was off 0.4 percent after a 0.6 percent gain the previous day.

The recent selloff in emerging markets were driven by worries about a slowdown in China and the Fed's tapering of its massive stimulus. As a result, investors were relieved after a strong performance in China's January trade data on Wednesday.

Adding to the positive mood, the U.S. Congress approved legislation on Wednesday to increase the country's debt limit for a year, avoiding a repeat of a nasty political showdown that led to government shutdown in October.

Investors are now looking ahead to U.S. retail sales and jobless claims due later in the day.

On Wall Street, shares were almost flat on Wednesday after a four-day rally as investors pondered whether valuations had become stretched.

Emerging market shares had a better day, with MSCI's index of emerging market stocks adding 0.9 percent.

In the currency market, the British pound stood out after a surprisingly upbeat economic outlook from the Bank of England prompted markets to price in an interest rate hike in early 2015.

The sterling edged up to $1.6610, getting near its 2 1/2-year high of $1.6667hit late last month.

In contrast, the euro slipped to $1.3589, pulling further away from highs of $1.3684 hit on Tuesday after dovish comments from a top European Central Bank official.

ECB Executive Board member Benoit Coeure said the idea of cutting into negative territory the rate the ECB pays banks to hold their deposits overnight was "a very possible option".

"Being a member of the six person Executive Board, Coeure's comments cannot be lightly dismissed and stoke expectations for action at the March meeting," said Sean Callow, currency strategist at Westpac in Sydney.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Amidst Sino-Indian bonhomie, the Tibet issue cannot be wished away

    Tibet did not figure in the three-day high-level meetings between India and the People’s Republic of China (PRC).

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

<b>Riskfactor</b>: Intertemporal choices

Intertemporal choice is the study of the relative value people ...

Parvez Imam

Why we all have blood on our hands

What does the Jammu and Kashmir flood make us think? ...

Dharmendra Khandal

The peculiar possibilities of animal poop

You can tell a lot about an animal by its ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture