Asian shares dip on profit-taking after Dow hits 22,000

People walk past an electronic board showing stock prices outside a brokerage at a business district in Tokyo, Japan, January 23, 2017.  REUTERS/Kim Kyung-Hoon
walk past an electronic board showing stock prices outside a
brokerage at a business district in Tokyo

Thomson Reuters

By Hideyuki Sano

TOKYO (Reuters) – Asian shares dipped on Thursday as investors
locked in recent gains after Wall Street’s Dow Jones Industrial
Average broke the 22,000 barrier for the first time in its
121-year history.

MSCI’s broadest index of Asia-Pacific shares outside Japan
<.miapj0000pus> dropped 0.5 percent, with South Korea’s
Kospi index <.ks11> falling 1.5 percent in early

Samsung Electronics , which on Friday posted its biggest daily
fall since October, fell 2.6 percent, giving up the gains made so
far this week.

“Those shares that were bought heavily on Tuesday are being sold
aggressively. I would suspect investors want to take profits
quickly after they saw a sharp correction last week,” said Yukino
Yamada, senior strategist at Daiwa Securities.

Japan’s Nikkei <.n225> dipped 0.1 percent while the broader
Topix <.topx> was flat.</.topx></.n225>

In New York overnight, the Dow Jones Industrial Average
<.dji> topped the 22,000 mark for the first time on
strength in Apple shares following its earnings.</.dji>

The S&P 500 <.spx> gained 0.05 percent, hovering just
below its record high touched last week, supported by upbeat
earnings and rising expectations that the Federal Reserve’s
policy tightening will move ahead only slowly.</.spx>

“The stock markets are supported by steady growth in earnings,”
said Mutsumi Kagawa, chief global strategist at Rakuten
Securities, noting steady growth in forward earnings in the
United States, Japan and elsewhere.

“In addition, even as the economy grows, both policy interest
rates and long-term interest rates remain low because inflation
remains tame due to various structural reasons,” he added.

U.S. inflation has been contained even as the country’s labor
market appears to be in its best shape in many years, with the
jobless rate staying near a 17-year low.

A report by private payrolls processor ADP showed on Wednesday
that private U.S. employers added 178,000 jobs in July, slightly
below economists’ expectations, although payroll gains in June
were revised up to 191,000 from an originally reported 158,000.

Market participants expect the more closely watched government
employment report due on Friday to show a solid expansion in U.S.
job creation.

In the currency market, the dollar has been losing its luster as
the euro zone and a few other countries have been slowly winding
back stimulus.

The European Central Bank, which is buying 60 billion euro
government bonds per month to shore up the economy, is expected
to unveil a plan to wind down the asset purchase program in
coming months.

The euro traded at $1.1858, after having risen to as high as
$1.19105 on Wednesday, its highest level since January 2015.

The common currency has strengthened sharply against the
safe-haven Swiss franc , having gained more than four percent in
less than two weeks.

The British pound held near its highest in almost 11 months
against a broadly weaker dollar ahead of the Bank of England’s
“Super Thursday”, which could shed light on how soon interest
rates could be lifted.

Sterling has been supported in recent weeks by expectations the
bank might finally be getting ready for a hike after a series of
hawkish comments from policymakers, though Governor Mark Carney
could be more cautious.

The yen stepped back from Tuesday’s 1 1/2-month high of 109.92
yen per dollar to trade at 110.71 yen .

Oil prices held firm as surging U.S. fuel demand and strong
refinery runs offset data from the Energy Department that showed
crude inventories did not fall as much as expected last week.

Brent crude futures slipped 0.3 percent to $52.22 per barrel,
still not far from Wednesday’s high of $52.93, its highest level
in 10 weeks.

(Reporting by Hideyuki Sano; Editing by Eric Meijer)

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