Asian markets mostly up on US stimulus hopes
Posted: 15 June 2012
HONG KONG: Asian markets mostly rose on Friday amid hopes that the US Federal Reserve will embark on a fresh round of economic stimulus and Greece will return a pro-austerity government in weekend polls.
However, with Spain's borrowing costs hitting another record high despite a $125 billion bank bailout, traders remain on edge while German Chancellor Angela Merkel warned leaders not to place too many expectations on Berlin.
Sydney advanced 0.37 per cent, or 15.1 points, to 4,057.3, Hong Kong surged 2.26 per cent, or 425.54 points, to 19,233.94 and Shanghai rose 0.47 per cent, or 10.90 points, to 2,306.85.
Tokyo closed flat, nudging 0.43 points up to 8,569.32, with dealers unimpressed with the Bank of Japan's decision to hold off any fresh stimulus moves for the time being.
Seoul closed 0.71 per cent, or 13.32 points lower at 1,858.16.
In the United States weekly initial jobless claims rose more than expected. Consumer prices fell in May for the first time in two years, driven by falling gasoline prices, but core inflation rose 0.2 per cent for the third straight month.
The numbers sparked speculation that the US central bank would start a third round of stimulus known as quantitative easing in a bid to kickstart the world's biggest economy.
"Hopes for more easing steps bolstered risk appetite" in New York, said Takashi Hiroki, Monex Inc. chief strategist in Tokyo. "Market sentiment is brighter," he told Dow Jones Newswires.
On Wall Street the three main indexes advanced on hopes for more cash flooding into the market. The Dow gained 1.24 per cent, the S&P 500 climbed 1.08 per cent and the Nasdaq added 0.63 per cent.
"Sentiment seemed to strengthen on hopes that underwhelming data might compel the Fed to implement another round of quantitative easing when they meet next week," said Briefing.com.
In Britain finance chief George Osborne and Bank of England governor Mervyn King said they would flood banks with about $155 billion in a bid to jump-start lending to households and businesses and fend off a potential storm from Europe.
But while investors absorbed the possibility of fresh cash in the system Europe's troubles tempered sentiment.
On Thursday the interest rate on Spanish 10-year government bonds soared to 6.9650 per cent, the highest since the birth of the single currency in 1999, and close to the danger-zone 7.0 per cent considered unsustainable to service debts.
The jump came after Moody's on Wednesday slashed Spain's sovereign debt rating by three notches, saying the bank bailout would put extra strain on the country's already weak finances.
Greek shares soared more than 10 per cent on speculation that voters would elect a government committed to austerity policies key to the country receiving further bailout aid and staying in the euro.
The surge comes just days ahead of Sunday's vote, which was called after an inconclusive poll at the start of May that sent shockwaves through global markets amid fears a Greek euro exit would have calamitous knock-on effects.
Merkel said "all eyes" would be on her at a key G20 summit next week as she looked to play down expectations that Europe's top economy and effective paymaster could conjure up all the answers.
"Germany is strong, Germany is an engine of economic growth and a stability anchor in Europe," she said.
"But Germany's powers are not unlimited," she warned in a speech to lawmakers ahead of the June 18-19 G20 meeting in Mexico.
On currency markets the euro bought $1.2630 and 99.75 yen, compared with $1.2630 and 100.21 yen in New York late Thursday.
The dollar stood at 78.98 yen, down from 79.34 yen.
And the Australian dollar rose back above parity with the greenback, trading at US$1.0028, up from US$0.9948 on Thursday, having fallen in recent weeks.
Oil prices rose. New York's main contract, light sweet crude for delivery in July, was up 79 cents to $84.70 a barrel and Brent North Sea crude for August delivery gained 78 cents to $97.95 in late afternoon.
Gold was worth $1,623.60 an ounce at 0820 GMT, compared with $1,620.10 late Thursday.
In other markets:
-- Taipei rose 1.14 per cent, or 80.73 points, to 7,155.83.
Hon Hai Precision rose 2.92 per cent to NT$84.5 while TSMC was 1.39 per cent lower at NT$78.1.
-- Manila closed 1.80 per cent, or 90.22 points, down at 4,930.63.
Aboitiz Equity ventures fell 6.25 per cent to 45 pesos, while sister firm Aboitiz Power ended 2.30 per cent down at 31.80 pesos.
-- Wellington rose 0.91 per cent, or 30.99 points, to 3,447.07.
Fletcher Building gained 2.28 per cent to NZ$6.29, Telecom rose 3.13 per cent to NZ$2.475 and Contact Energy was up 1.92 per cent at NZ$4.78.
-- Singapore closed up 1.34 per cent, or 37.19 points, to 2,811.00.
Palm oil producer Wilmar International was up 2.35 per cent to S$3.49 while Oversea-Chinese Banking Corp gained 2.96 per cent at S$8.70.
-- Jakarta rose 0.7 per cent, or 26.49 points, to 3,818.11.
Thermal coal producer Bumi rose 4.9 per cent to 1,080 rupiah after it fell more than 15 per cent in the previous four sessions, while Bank Mandiri is up 2.9 per cent at 7,000 rupiah.
Bangkok rose 1.10 per cent, or 12.72 points, to 1,165.73.
-- Oil giant PTT gained 3.07 per cent to 336.00 baht, while energy firm Banpu added 2.18 per cent to 468.00 baht.
-- Kuala Lumpur stocks ended 0.53 per cent, or 8.29 points, higher at 1,579.23.
Telecommunications firm Axiata Group gained 0.37 per cent to 5.41 ringgit, while budget carrier AirAsia added 0.27 per cent to 3.66. Public Bank lost 0.29 per cent to 13.66 ringgit.
-- Mumbai rose 1.63 per cent, or 271.95 points, to 16,949.83.
The country's biggest automaker Tata Motors was up 5.75 per cent to 240.05 rupees while Tata Steel, the world's seventh-largest steelmaker, was up 1.67 per cent at 413.40.
Publish date: 15/06/12