13, September 2017

Asian equity indexes gain as US tax reform looks closer

Key stock indexes in Asia were mostly higher on Wednesday following a strong lead from Wall Street in the previous session as remarks over the tax reform dissipated investors’ concerns.

Australia ASX -2.40 -0.04% 5,804.00 CLOSED

Shanghai Comp +3.81 +0.11% 3,383.30 OPEN

Hang Seng Index -80.74 -0.29% 27,891.50 OPEN

Nikkei 225 +89.20 +0.45% 19,865.82 CLOSED

TSEC 50 Index -77.47 -0.73% 10,532.88 CLOSED

In an interview with CNBC TV network, US Treasury Secretary Steven Mnuchin explained that President Trump’s tax reform is currently a key priority for the government and that all efforts are being directed to get the new legislation passed before the end of 2017.

Also, Mnuchin said the tax reform could be backdated to January 1, 2017, which according to him would be “big boon for the economy.” The tax reform has been an important campaign promise for Donald Trump. The idea is to simplify and reduce the current tax pressure.

Following the statement, US markets rallied to new record highs, leaving the Dow Jones Industrial Average standing at 22,118.86 points and the S&P 500 with a 0.34 percent gain. The tech-heavy Nasdaq registered a similar advance and ended the session at 6,454.28.

The American currency was also supported by upbeat remarks over the tax reform issue. However, the dollar index corrected downwards overnight and traded near 91.57 by the time of this writing, easing 0.29 percent.

In the Asian region we’ve seen Apple suppliers retreat during the day. Yesterday, the company unveiled a list of new products, including iPhones X, 8 and 8 plus, as well as Apple Watch 3rd Generation and 4K Apple TV.

Market sentiment was also supported by easing geopolitical fears on the Korean peninsula. Earlier this week, the UN Security Council approved a new package of sanctions against Pyongyang in response to its latest nuclear test.

Ahead in today’s session, traders will be focusing on the release of the employment data from the United Kingdom, including average earnings and the unemployment rate for July, as well as the claimant count change for August at 08:30 GMT. The Eurozone will publish its latest reading on industrial production as of 09:00 GMT.

In the American session, attention will be directed to the US producer price index (PPI) for August as of 12:30 GMT, with a 0.3 percent build eyed. Last month’s Federal Budget Balance is due to be published at 18:00 GMT, with a $119.5 billion deficit seen.