Overnight gains on Wall Street meant that Asian markets rose higher, amid Italy’s failed referendum vote. Investor optimism seems to have bounced back, following the uncertainty prior to the Italian referendum. The global response to the referendum led to the Asian markets being one of the biggest risers.
Japan’s Nikkei 225 index rose by 0.5% to 18,370.83 along with Taiwan’s Y999 index that gained 0.9%. South Korea’s Kospi also grew 1.4% followed by Australia’s S&P/ASX 200 that gained 0.5%. While the Kospi rose, 9 of the conglomerate leaders face public interrogation in Parliament. Hong Kong’s HSBC gained 2.6% while the Japanese giant, Mitsubishi, rose 1%.
In Australia, stocks hit a record high for the year as oil prices also rose. The OPEC’s deal to cut production by half has led to oil prices rising and many are hopeful that the OPEC will abide by the deal unlike previous ones. Australia’s central banks held the cash rates at a low of 1.5%, as predicted by markets around the world.
Chris Weston, chief marketing strategist at IG, stated that the focus of investors is back on 2017 and reflation is on the cards. In China, the Shanghai factor closed lower at 0.17% thanks to worries fueled by wrong predictions from various currency data providers including Google. The sites showed that the yuan was 7.49 against the dollar, which is an 8.8% increase. Google later admitted that it was a bug and have since changed it.
The focus on reflation comes from the election of Donald Trump as many investors are hoping that he will promote corporate growth and reduce taxes to boost inflation. These hopes have been spurred on by continuing reports of improved economic growth both in the US and China.
Globally, the markets shrugged off the Italian referendum, which previously was hyped as having major financial consequences. U.S indexes like Nasdaq rose 1.1% to finish at 5,308.89 points whereas Dow Jones ended the day at 19,216.24 points. The S&P 500 also grew 0.58% and finished at 2,204.71 points.
Major European indexes also showed positive growth with Stoxx 600 ending 0.56% higher with all sectors in the green, almost. Oil prices fell on Tuesday as U.S Crude futures and Brent futures both decreased by 0.93% and 0.71% respectively. The dollar index also showed reduced prices from around the world.