Stocks Rally, Dollar in Worst Week Since February: Markets Wrap

(180912) -- NEW YORK, Sept. 12, 2018 (Xinhua) -- Traders work at the New York Stock Exchange in New York, the United States, on Sept. 12, 2018. NIO Inc., a Chinese electric vehicle start-up, rang the New York Stock Exchange (NYSE) opening bell on Wednesday in celebration of its initial public offering (IPO). The company, trading under the ticker symbol of NIO, announced the pricing of its IPO of 160,000,000 American depository shares (ADSs), at 6.26 U.S. dollars per ADS for a total offering size of approximately 1 billion dollars, assuming the underwriters do not exercise their option to purchase additional ADSs. Founded in 2014, NIO, dubbed as China's Tesla, is a pioneer in China's premium electric vehicle market. (Xinhua/Qin Lang) - Qin Lang -//CHINENOUVELLE_CnynysE000082_20180913_TPPFN0A001/Credit:CHINE NOUVELLE/SIPA/1809130915

Asian stocks extended a rally after their recent battering drove valuations to a two-year low, following a technology-supported advance in U.S. equities. The dollar held declines after U.S. inflation unexpectedly cooled in August.

With the dollar heading for its biggest weekly loss since February, prospects for U.S.-China trade talks and action by Turkey to support its currency, it all made for a positive tone Friday. Shares in Japan, South Korea and Hong Kong climbed, while China stocks underperformed. Oil headed for a weekly gain as traders keep watch on Hurricane Florence’s path to the U.S. east coast.

China’s yuan stayed lower and equities in Shanghai did little after August economic data showed the economy in a modest slowdown. China aside, equities in Asia ended the week on a high after enduring the longest daily losing streak in 16 years.

News that the U.S. and Chinese governments are working out the details for a new round of trade talks helped lift sentiment, though it’s far from certain whether meaningful progress will eventuate. U.S. stocks pulled back from the day’s highs after President Donald Trump tweeted that the U.S. isn’t under pressure to reach a trade agreement with China.

While U.S. equities are now “highly priced,” they could still go “a lot higher,” Robert Shiller, the Nobel laureate famed for his analysis of asset-price bubbles, said on Bloomberg Television. “The U.S. is just doing great right now in terms of the strength of the economy and the stock market,” with Trump’s tax cuts and deregulation moves helping stoke sentiment, he said.

Gilt and pound traders were assessing a report that Bank of England Governor Mark Carney joined a cabinet meeting Thursday to explain that a no-deal Brexit would probably see interest rates rise rather than fall. The lira kept most of its gains after Turkey’s larger-than-expected interest-rate hike.

Here are some key events coming up for the remainder of this week:

U.S. retail sales, industrial production, consumer sentiment on Friday.These are the main moves in markets:

Stocks

Japan’s Topix index closed 1.1 percent higher. South Korea’s Kospi index advanced 1.3 percent. Hong Kong’s Hang Seng gained 1 percent. The Shanghai Composite advanced 0.1 percent. Australia’s S&P/ASX 200 Index rose 0.6 percent. Futures on the S&P 500 Index were little changed. The S&P 500 rose 0.5 percent Thursday. Futures on the U.K.’s FTSE 100 Index rose 0.2 percent. The MSCI Emerging Market Index gained 1 percent, rising for a third straight day.

Currencies

The yen held at 111.87 per dollar. The offshore yuan slid 0.1 percent to 6.8511 per dollar. The euro was little changed at $1.1693. The Bloomberg Dollar Spot Index was little changed Friday, down 0.9 percent for the week.