First Trading Day of 2018 Saw Asian Shares Kick Off

By Rafael Matsunaga [CC BY 2.0] via Wikimedia Commons

2017 was closed with a losing day for major indexes stateside which is ahead of the first trading session of Asia for the new year, with the US dollar touching its lowest levels in a period of three months.

Last year, equities in the region had significantly run up, with the broad index of shares of MSCI in the Asia Pacific excluding Japan closing the year with gains of over thirty percent.

In early trade over in Sydney, the S&P/ASX 200 was dropped by 0.16 percent.

When South Korean markets come online, geopolitical developments regarding North Korea could likely be in focus.

On Monday, during his New Year’s day address, Kim Jong Un, the North Korean leader, declared his country a nuclear power. However, Reuters reported that he also acknowledged that he was “open to dialogue” with South Korea. Earlier, South Korea had confiscated two vessels that are suspected of violating sanctions that were imposed the United Nations by smuggling oil to North Korea.

Markets in New Zealand, Thailand, and Japan are closed for holidays.

In the last trading session of last year, Wall Street finished slightly lower. The industrial average of Dow Jones dropped 118.29 points or 0.48 percent to finish at 24,719.22, the S&P 500 dropped 0.52 percent to close at 2,673.61, and the Nasdaq composite finished the session flat at 6,903.39.

Still, major indexes of the U.S. recorded solid gains for the year. The Dow Jones increased 25.2 percent in 2017 and the benchmark S&P 500 grew 19.5 percent.

Markets in Europe were a similar story, with most indexes finishing lower on Friday. However, on average, it notched the highest annual gains since 2013.

In currencies, the greenback was on the back foot compared to a basket of six currencies, with the dollar index trading at 92.227 at 6:39 a.m. HK/SIN. On Friday, the index had seen its largest annual decline since 2003.

The dollar traded at 112.60 against the yen.

Meanwhile, the Australian dollar mostly held onto gains that were made before the new year, with the currency last trading at $0.7805. The Australian dollar has been backed by the weaker greenback as well as stable commodity prices.

On the energy sector, Reuters said that Brent crude futures added 45 cents to close at $66.62 per barrel and U.S. West Texas Intermediate closed at $60.42, its highest close since the mid-2015.

What’s on tap

Reuters said that China would probably be in focus, with a survey concentrating on manufacturing activity at smaller businesses that are due in the morning. Meeting expectations of analysts, last week, the official manufacturing Purchasing Managers’ Index (PMI) had come in at 51.6 for the month of December.