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Asia stocks hit two-year high after US CPI data

Jul 17 2017 09:24
Abhishek Vishnoi, Bloomberg

Singapore - Asian ex-Japan equities rose to their highest in more than two years, tracking gains in the US on Friday. China reported better-than-expected second quarter gross domestic product figures.

The MSCI Asia Pacific Index ex-Japan rose for a sixth straight session, adding 0.4 percent to 520.64 as of 11:45 a.m. in Hong Kong, set for its longest winning streak since March. All industry groups gained with material stocks leading the gains. Japan is closed for a public holiday.

"It’s a positive signal the China’s economic growth has not only bottomed but momentum is picking up," Margaret Yang, a strategist at CMC Markets in Singapore said by phone. China’s growth is a “leading power” to Asian countries which can mean more spending and consumption from Asia’s biggest economy, she said.

The MSCI Asia Pacific Index also climbed for a sixth day, hitting a nine-year high two days in a row. The benchmark rallied late Friday on optimism interest rates will stay lower for longer after June inflation and retail sales missed expectations.

“With Yellen emphasising that rate direction is on price inflation performance, markets are expecting an extension to the more accommodative environment after the inflation data,” said Jingyi Pan, market strategist at IG Asia Pte.

The Shanghai Composite Index pared declines of as much as 2.6% amid concern that the outcomes of a closed-door conference on regulation over the weekend may be tougher rules and more initial public offerings. Gross domestic product increased 6.9% in the second quarter from a year earlier, compared with a 6.8% median estimate in a Bloomberg survey.

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equities  |  markets  |  asian markets

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