SYDNEY- Asian shares neared a 20-month top on Monday as Wall Street extended its run of record peaks on solid US economic data and lashes of liquidity from the Federal Reserve.
Oil prices jumped as oilfields in southwest Libya began shutting down after forces loyal to Khalifa Haftar closed a pipeline, potentially reducing national output to a fraction of its normal level.
Early turnover in Asian shares was light with US stock and bond markets closed for the Martin Luther King Jr. holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan firmed 0.1 percent, after notching its highest close since June 2018. Japan’s Nikkei added 0.2 percent to be near its highest in 15 months.
Chinese shares opened firm with the blue-chip CSI300 index up 0.2 percent.
Australia’s main index scored another all-time peak and South Korea was near its best level since October 2018. E-Mini futures for the S&P 500 edged up 0.1 percent.
Eyes will be on US corporate earnings with Netflix Inc, Intel Corp and Texas Instruments Inc set to report this week, while central banks in the European Union, Canada and Japan hold policy meetings.
Sentiment was supported by the relentless run of record highs on Wall Street. Only three weeks into the new year, the S&P 500 has gained just over 3 percent and the NASDAQ almost 5 percent.
Ray Attrill, head of foreign exchange strategy at National Australia Bank, suspects the strength on Wall Street owes much to the Federal Reserve’s decision in September to rein in rising repo rates by flooding markets with cash.
“The relationship between the size of the Fed’s balance sheet, now some 11 percent bigger than where it was in late September, and the performance of US risk assets is uncanny,” he said, noting the balance sheet had just hit a three-month top of $4.18 trillion.
Analysts at BofA Global Research noted global stock market capitalisation had ballooned by $13 trillion since its September lows and the S&P was only 5 percent away from marking the biggest bull run in history. — Reuters
