Asian shares mixed after Bernanke comments on stimulus
HONG KONG—Asian markets were mixed on Thursday in a muted reaction after US Federal Reserve chief Ben Bernanke said the bank had no plan to wind down its stimulus until the economy was back on track.
The comments, which came as a closely watched report said growth was moderate, helped calm nervous dealers as Wall Street ended in positive territory.
Tokyo rose 1.32 percent, or 193.46 points, to 14,808.50 as confident forex dealers pushed the dollar back above the 100 yen level, while Sydney added 0.24 percent, or 11.7 points, to close at 4,993.4.
However, Seoul fell 0.64 percent, or 12.01 points, to 1.875.48 and Hong Kong dipped 0.12 percent, or 26.65 points, to 21,345.22 while Shanghai shed 1.05 percent, or 21.52 points, to 2,023.40.
In the first of his two days of testimony to Congress, Bernanke told Representatives the vast bond-buying program would remain in place until the Fed is happy the economy can stand on its own two feet.
“I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” Bernanke told the lawmakers.
When launching the scheme in September the bank said it would only reel it in when unemployment had fallen to a satisfactory level.
Bernanke said the economy was expanding at a moderate pace and showed solid signs of strength in various areas, a view supported by the Fed’s Beige Book report, which was also released on Wednesday. Bernanke is due to be grilled by Senators on Thursday.
SMBC Nikko Securities general manager of equities Hiroichi Nishi said: “Bernanke’s words were nothing new, but did have a calming effect for those still harbouring jitters about a near-term end of the US easing policy.”
The testimony lifted US shares. The Dow added 0.12 percent, the S&P 500 put on 0.28 percent and the Nasdaq was up 0.32 percent.
On forex markets the dollar broke back above the 100 yen barrier as traders saw the news as a boost for the regional economy.
In afternoon trade the greenback was at 100.25 yen, compared with 99.60 yen in New York late Wednesday, while the euro fetched $1.3109 and 131.37 yen against $1.3125 and 130.73 yen.
Eyes will now be on a meeting of G20 finance ministers on Thursday and Friday in Moscow, where officials are expected to discuss the Fed’s stimulus, while Japan will hold upper house elections at the weekend.
On oil markets New York’s main contract, West Texas Intermediate for August delivery, was down eight cents at $106.40 a barrel, while Brent North Sea crude for September shed 11 cents to $108.50.
Gold cost $1,281.20 per ounce at 1035 GMT, compared with $1,286.30 late Wednesday.
In other markets:
— Taipei fell 0.78 percent, or 64.07 points, to 8,194.88.
Taiwan Semiconductor Manufacturing Co. fell 3.21 percent to Tw$105.5 while Hon Hai rose 0.78 percent to Tw$78.0.
— Manila closed 1.12 percent higher, adding 73.63 points to 6,648.35.
Philippine Long Distance Telephone rose 2.43 percent to 2,956 pesos and Universal Robina added 2.25 percent to 127 pesos, while SM Investments gained 0.64 percent to 950 pesos.
— Wellington fell 0.34 percent, or 15.59 points, to 4,563.39.
Contact Energy was down 1.28 percent at NZ$5.42, Fletcher Building was off 0.59 percent at NZ$8.47 and Telecom rose 0.65 percent to NZ$2.32.
— Bangkok jumped 2 percent, or 29.11 points, to 1,487.19.
Airports of Thailand surged 5.62 percent to 188 baht, while telecoms company True Corp. gained 5.42 percent to 8.75 baht.
— Jakarta ended up 0.89 percent, or 41.43 points, at 4,720.43.
Asia Pacific Fibers rose 12.26 percent to 119 rupiah, palm oil producer Astra Agro Lestari gained 2.34 percent to 17,500 rupiah, while car maker Astra International lost 1.48 percent to 6,650 rupiah.
— Singapore closed up 0.31 percent, or 9.87 points, at 3,218.20.
Oil rig maker Keppel Corp. was up 0.18 percent to Sg$10.90 and United Overseas Bank gained 0.10 percent at Sg$21.15.
— Kuala Lumpur gained 0.16 percent, or 2.88 points, to 1,791.54.
Electric utility Tenaga added 1.8 percent to 9.01 ringgit, while telecommunication firm Maxis rose 1.3 percent to 7.01. Palm oil plantation conglomorate IOI Corp. lost 2.5 percent to 5.38 ringgit.
— Mumbai rose 0.90 percent, or 179.68 points, to 20,128.41 points, led by banking and oil stocks.
India’s state-run UCO Bank jumped 14.92 percent to 73.55 rupees, while oil explorer ONGC rose 4.42 percent to 314.75 rupees.—Danny McCord