Asian stocks hit a record high on Monday and the dollar plumbed an all-time low.
New highs for stocks and oil
By Ian Chua 2 hours, 26 minutes ago
HONG KONG (Reuters) - Asian stocks hit a record high on Monday and the dollar plumbed an all-time low versus the euro and a basket of major currencies as investors bet the U.S. Federal Reserve will cut interest rates this week.
A wilting dollar coupled with a brief halt to one-fifth of Mexico's production fired up oil prices, sending U.S. crude above $93 a barrel for the first time. Gold rode on the coat-tails of oil to a 28-year high of $792.60 an ounce and other base metals such as copper also firmed on the weak dollar.
Further lifted by upbeat earnings from firms such as Nissan Motor (7201.T), Japan's Nikkei average (.N225) climbed 1.6 percent to a one-week high by 0337 GMT, while MSCI's measure of other Asia Pacific stocks advanced 1.9 percent.
The MSCI index hit an all-time high of 585.32, surpassing the previous peak of 574.04 set on Friday and has gained more than 45 percent this year -- triple the gains for MSCI's main world equity index (.MIWD00000PUS).
"A (U.S.) rate cut is already factored in and this is helping to boost the Nikkei," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
Lower U.S. interest rates should boost economic growth in Asia's main export market, and also make equity valuations more attractive.
Among major markets in the region, Hong Kong's Hang Seng Index (.HSI) and South Korea's KOSPI (.KS11) both reached new life highs, while Australia's S&P/ASX 200 index (.AXJO) was a whisker away from its record high set on October 15.
After two straight weeks of losses, Chinese mainland stocks rebounded, pushing the Shanghai Composite Index (.SSEC) over 2 percent higher.