Asian stocks rise as Wall Street gets tax-hope boost

Business Tuesday 19/December/2017 12:36 PM
By: Times News Service
Asian stocks rise as Wall Street gets tax-hope boost

Tokyo: Asian stocks advanced on Tuesday after a record-setting session on Wall Street on bets that US lawmakers would pass a major tax overhaul, while the dollar sagged as traders were less sanguine about the bill's economic impact.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent.
Australian shares added 0.4 per cent, South Korea's KOSPI climbed 0.6 per cent and Japan's Nikkei gained 0.2 per cent.
Wall Street hit record highs on Monday on growing optimism about lower corporate tax rates as the Republican tax bill moved closer to passage.
Global markets have been buffeted in recent weeks by shifting expectations about President Donald Trump's ability to push through his signature policy.
The bill would cut US corporate tax rates to 21 per cent from 35 per cent, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts.
"While the markets have already priced in the corporate tax cut for the most part, it does provide an advantage for US corporations. The rising trend in broader equities led by the US markets looks to continue for a while," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
The dollar index against a basket of six major currencies was little changed at 93.705 after losing 0.25 per cent overnight, as some traders questioned the overall economic impact of the tax overhaul.
The dollar was also capped by doubts the tax reforms will not trigger sizable repatriation of funds back into the United States as expected.
"The bill's plan to cut tax rates on repatriation of foreign profits would be a permanent measure, rather than temporary one. Corporations would therefore not feel rushed to repatriate funds home, meaning less support for the dollar," Ichikawa at Sumitomo Mitsui Asset Management said.
The euro was steady at $1.1783 after rising 0.3 per cent the previous day. The dollar was steady at 112.615 yen after pulling back from a high of 112.840 overnight.
In commodities, oil prices edged higher, supported by a North Sea pipeline outage and a workers' strike in the Nigerian energy industry.
US crude futures climbed 0.2 per cent to $57.28 per barrel.
Spot gold was little changed at $1,260.72 per ounce after climbing 0.5 per cent the previous day on the sagging dollar.