Asian shares conquer 10-year peak, commodities ride high on China

Updated: Mon, Oct 16, 2017
04:52 pm
Reuters
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Asian shares rallied to a decade high on Monday as upbeat Chinese data boosted commodity prices, while the euro extended losses after the Catalan leader failed to give a clear answer to whether or not he declared independence from Spain.

MSCI`s broadest index of Asia-Pacific shares outside Japan gained for a fifth day running to its highest level since late 2007.

Japan`s Nikkei climbed for a sixth day to a level not seen since November 1996. Australian shares extended their winning streak to a fourth straight session to rise 0.6 percent, while South Korea`s stock index set a new record.

European stock futures pointed to a steady start while Dax futures and CAC 40 were a tad firmer.

Commodities also joined the party with copper at a three-year top, underpinned by robust economic data from China, the world`s top user of metals.

Figures on Monday showed China`s producer prices beat market expectations to rise 6.9 percent in September from a year earlier.

Prices of iron ore and coke, key ingredients in steel-making, jumped with Dalian iron ore futures, rising 2.5 percent to a 2-1/2 week high while coke for January delivery gained 1.6 percent.

News from China could be a key market driver this week, given the Communist Party congress starting on Wednesday and third-quarter economic data.

"When it comes to the Congress, we expect policy consistency," said Catherine Yeung, Investment Director, Fidelity International which has $397 billion assets under management. "It would be concerning if that wasn`t the case."POLITICS PLAY

It wasn`t all beer and skittles though, with politics putting a damper on euro bulls. Catalan leader Carles Puigdemont said in a letter to Spanish Prime Minister Mariano Rajoy that the two should meet as soon as possible to open a dialogue over the next two months.

In Austria, young conservative Sebastian Kurz is on track to become the country`s next leader after Sunday`s election. He is seen as likely to seek a coalition with the resurgent far right because his party is far short of a majority.

The developments threaten to disrupt a move by German Chancellor Angela Merkel and French President Emmanuel Macron to draw up a roadmap to deeper European Union integration.

The euro was poised for a third day of losses. It was last down 0.3 percent at $1.1791 as it slipped further from a 2-1/2-week high of $1.1880 touched on Thursday.

"The euro`s dismal price action after Friday`s low U.S. inflation data hinted strongly that investors are in no mood to assume the best in euro zone politics," said Sean Callow, Sydney-based senior currency strategist at Westpac Banking Corp.

"There is a lot of interest in whether Spain might be coming apart at the seams and whether Austria will now be a spoiler for any new Merkel-Macron projects."

Merkel herself is no longer in a strong position as she prepares for tricky coalition talks after suffering a defeat at the hands of the Social Democrats in a vote in the northern state of Lower Saxony.

The dollar index, which measures the greenback against a basket of currencies, was a touch firmer at 93.212.

In commodities, U.S. oil futures jumped to and hovered near a six-month high on supply fears after Iraqi forces began moving towards oil fields held by Kurdish Peshmerga fighters near the oil-rich city of Kirkuk.

U.S. crude climbed 0.9 percent to $51.92 a barrel, not far from $52.85 touched late last month - a level not seen since April. Brent crude climbed 1.2 percent to $57.88 per barrel.

Gold slipped 0.1 percent to $1,302.5.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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