By Lucy Craymer
While other Asian markets mostly marked time Friday, Hong Kong’s Hang Seng Index rose to a record.
Regional stocks were affected by the late-Thursday rally in the U.S. dollar, which came after President Donald Trump declared the currency would get stronger. The dollar pulled back after rising further in early Asian trading, with the Wall Street Journal Dollar Index /zigman2/quotes/210673925/realtime XX:BUXX +0.10% recently down early 0.5%%.
The Hang Seng /zigman2/quotes/210598030/delayed HK:HSI +1.20% closed up 1.5% on strength in bank stocks, a major part of the index. organ Stanley boosted its stock target on a number of Chinese lenders, including China Construction Bank /zigman2/quotes/208974133/delayed HK:939 +1.76% and Industrial & Commercial Bank of China /zigman2/quotes/201401473/delayed HK:1398 +1.35% , citing signals that include higher earnings forecasts.
“Hong Kong is still very much the gateway for China plays and the recent round of macro data…shows fair sailing,” said Gavin Parry, managing director at Parry International Trading. He added that concerns about debt levels China hadn’t yet come to anything, making investing into the region attractive.
China Construction jumped 4% to a record high while ICBC climbed nearly 3%. Internet giant Tencent /zigman2/quotes/204605823/delayed HK:700 +0.66% and insurer Ping An /zigman2/quotes/202773380/delayed CN:601318 +4.01% , which helped the Hang Seng surge 36% last year, rebounded 2.5% Friday. As of Thursday, the index had risen for 23 of the past 26 trading days, a total gain of 14%.
But the banks didn’t do much Friday for the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.59% , which also includes large-cap companies. The benchmark, coming off Thursday’s modest decline—after 18 gains in 19 days— closed down 0.2%.
Korea’s stock benchmark /zigman2/quotes/210598069/delayed KR:180721 +3.50% closed up 0.5%.
The dollar also moved Japan’s export-reliant market, giving it early strength that faded as the currency’s gains eased. After being up as much as 0.5%, the Nikkei /zigman2/quotes/210597971/delayed JP:NIK +1.67% finished down 0.2%.
The dollar /zigman2/quotes/210561418/realtime/sampled JPYUSD -0.3980% fell to ¥108.50 on Thursday, before jumping to ¥109.75. It spend the afternoon in Asia around ¥109.20.
The dollar slipped to three-year lows this week after U.S. Treasury Secretary Steven Mnuchin said a “weaker dollar is good for trade.” But Trump, interviewed by CNBC at the World Economic Forum in Davos, Switzerland, delivered a different message, saying “the dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar.”
Trump will deliver a speech at the forum Friday.
Australian and Indian markets were closed for holidays. In light trading, New Zealand’s NZX- /zigman2/quotes/211587880/delayed NZ:NZ50GR -1.15% down modestly this month—fell 0.7% to end at session lows, after two days of gains.
The dollar’s rebound sent commodities prices down Thursday afternoon. Oil, which had hit fresh three-year highs, finished New York trading down slightly, while futures fell some 0.5% in early Asian trading. But the drop was trimmed to 0.2% for the global Brent benchmark as the dollar pulled back.