Asian stock markets are mostly higher on Tuesday after U.S. stocks closed at fresh record highs overnight amid optimism about the outlook for Republican tax reform, which would cut corporate and individual tax rates. The House is scheduled to vote on the bill on Tuesday, with a vote in the Senate expected to follow shortly on the heels.
The Australian market is extending gains from the previous session following the record closing highs overnight on Wall Street. In addition, higher metal prices lifted resources stocks.
In late-morning trades, the benchmark S&P/ASX 200 Index is advancing 28.40 points or 0.47 percent to 6,067.30, off a high of 6,067.80. The broader All Ordinaries Index is adding 27.00 points or 0.44 percent to 6,157.00.
The major miners are advancing after a three percent increase in iron ore prices. BHP Billiton and Fortescue Metals are advancing almost 1 percent each, while Rio Tinto is higher by 0.5 percent.
Gold miners are also higher, lifted by higher gold prices. Newcrest Mining is rising almost 1 percent and Evolution Mining is gaining more than 3 percent after gold prices rose overnight.
In the oil sector, Woodside Petroleum is gaining almost 2 percent, Oil Search is rising 1 percent and Santos is up 0.1 percent.
In the banking space, ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank are advancing in a range of 0.2 percent to 0.8 percent.
Healthcare stocks of companies with U.S. operations are rising on optimism they will benefit from the U.S. tax cuts. CSL and Cochlear are adding almost 1 percent each, while Ramsay Healthcare is up 0.4 percent.
Meanwhile, Retail Food Group, owner of Gloria Jean's and Donut King, said it expects first-half profit to fall by 33 percent, with recent negative media reports about its treatment of franchisees partly to blame for the lower sales. The company's shares are losing more than 14 percent.
Shares of Fairfax Media are losing 0.4 percent as the company failed to overturn a decision by New Zealand's competition watchdog blocking a merger between the company's local assets and rival NZME.
On the economic front, minutes from the bank's December meeting revealed on Tuesday that members of the Reserve Bank of Australia's monetary policy committee said the global economy has shown signs of improvement this year. The members also noted that an appreciating exchange rate could throw a wrench into the domestic recovery.
In the currency market, the Australian dollar advanced against a weakened U.S. dollar. In early trades, the local unit was quoted at US$0.7666, down from US$0.7661 on Monday.
The Japanese market has pared initial gains and is flat despite the positive cues overnight from Wall Street amid optimism about U.S. tax reform.
In late-morning trades, the benchmark Nikkei 225 Index is adding 5.88 points or 0.03 percent to 22,907.65, off a high of 22,990.42 in early trades.
The major exporters are mixed as the yen gained slightly. Mitsubishi Electric is adding almost 1 percent and Canon is up 0.2 percent, while Sony is losing 0.5 percent and Panasonic is edging lower by less than 0.1 percent.
In the banking sector, Mitsubishi UFJ Financial is edging up 0.1 percent and Sumitomo Mitsui Financial is rising 0.3 percent.
Among automakers, Toyota is up 0.3 percent and Honda is adding almost 1 percent. In the oil space, Inpex is down 0.2 percent and Japan Petroleum is lower by 0.1 percent.
Among the market's best performers, Yokohama Rubber and Mitsubishi Motors are rising more than 2 percent each, while Hitachi is advancing almost 2 percent.
On the flip side, Kajima Corp. is losing more than 5 percent, Taisei Corp. is down almost 5 percent and Shimizu is declining 3 percent as the companies' names were involved in a probe into bid-rigging in a high-speed rail project. Tokai Carbon is lower by more than 3 percent.
In economic news, Japan will release final November numbers for machine tool orders today.
In the currency market, the U.S. dollar is trading in the upper 112 yen-range on Tuesday.
Elsewhere in Asia, Shanghai, Singapore, New Zealand, Indonesia and Taiwan are also higher, while South Korea, Hong Kong and Malaysia are modestly lower.
On Wall Street, stocks closed at new record closing highs on Monday, partly reflecting optimism about the outlook for Republican tax reform, which would cut corporate and individual tax rates. Positive sentiment may also have been generated by a report from the National Association of Home Builders showing an unexpected improvement in homebuilder confidence in the month of December.
The Dow climbed 140.46 points or 0.6 percent to 24,792.20, the Nasdaq advanced 58.18 points or 0.8 percent to 6,994.76 and the S&P 500 58.18 points or 0.1 percent to 6,994.76.
The major European markets also moved to the upside on Monday. While the U.K.'s FTSE 100 Index rose by 0.6 percent, the French CAC 40 Index and the German DAX Index jumped by 1.3 percent and 1.6 percent, respectively.
Crude oil futures edged down Monday, surrendering early gains as the U.S. dollar strengthened. WTI crude slipped $0.14 to close at $57.16 a barrel on the New York Mercantile Exchange.
by RTT Staff Writer
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