An equities rally spurred by the US Federal Reserve’s outlook on Friday found some life in Asian emerging markets, even amid a slump in Japanese and US shares.
Stocks in Indonesia reached a record and markets from Malaysia to South Korea climbed, helped by the weaker US currency.
Global stocks recorded the best week since January after the Fed raised its benchmark lending rate a quarter point without accelerating the timetable for future hikes.
“A less hawkish monetary policy in the US is more likely to push assets outside of the US into higher-risk, higher-return markets,” James Woods, a Sydney-based investment analyst at Rivkin Securities, said by telephone. “A weaker [US] dollar is supportive of those emerging markets generally. I’m not sure whether its going to be long-lived though. People are going to get back to focusing on the next Fed hike and also Trump’s policies which would be [US-]dollar supportive.”
Last week, China’s central bank also raised borrowing costs and the Bank of Japan left its monetary policy setting unchanged.
Volatility is retreating around the world after the central bank policy decisions.
At the same time, the defeat of anti-immigration candidate Geert Wilders in last week’s Dutch elections is being seen as a blow to populist political leaders, easing concerns ahead of French elections.
“Volatility is scarily low and there’s just a lot of complacency out there,” James Audiss, a senior wealth manager at Shaw and Partners in Sydney, said by telephone.
Shares in Taiwan on Friday rose 70.86 points, or 0.72 percent, to end the day at 9,908.69. The weighted index on the Taiwan Stock Exchange is up 2.9 percent from last week’s 9,627.89 points.
The MSCI Asia-Pacific Index on Friday climbed to 148.31, up 2.74 percent from last week’s 144.35.
Japan’s TOPIX fell 0.4 percent, posting its biggest weekly decline in more than a month.
The MSCI Emerging Markets Index rose 0.2 percent.
The Jakarta Composite Index gained as much as 0.7 percent to a record, after a 1.6 percent surge on Thursday.
India’s SENSEX climbed 0.4 percent, taking its gains for a holiday-shortened week to 2.6 percent, the most since the end of January.
New Zealand’s S&P/NZX 50 Index increased 0.1 percent. Australia’s S&P/ASX 200 Index rose 0.2 percent.
South Korea’s KOSPI gained 0.6 percent.
Hong Kong’s Hang Seng and the Hang Seng China Enterprises Index added at least 0.3 percent, after soaring the most since May on Thursday.
Additional reporting by CNA