Asian shares higher after Bernanke speech
HONG KONG—Asian markets mostly rose Monday after Wall Street’s rally on a key speech by US Fed chief Ben Bernanke, while Tokyo pared early gains on news Japan’s finance minister was set to become the new premier.
While Bernanke offered no new stimulus proposals in his speech at a central bankers’ conference Friday, traders were pleased that he left the door open for measures further down the line.
Tokyo gained 0.61 percent, or 53.57 points, to end at 8,851.35 after Finance Minister Yoshihiko Noda, a tax hawk, won a ruling party leadership contest that means he is poised to become Prime Minister.
Seoul climbed 2.84 percent, or 50.55 points, to 1,829.50.
Sydney added 1.51 percent, or 63.3 points, to end at 4,263.3 and Hong Kong rose 1.44 percent, or 282.23 points, to 19,865.11.
However, Shanghai fell 1.37 percent, or 35.78 points, to 2,576.41 after the central bank ordered lenders to keep more types of deposit in reserve, effectively squeezing credit amid concerns over inflation in China.
In his speech at Jackson Hole, Wyoming, Bernanke said the Fed had a range of tools that could help the US economy, which it will review in an expanded meeting of the policy-making Federal Open Market Committee (FOMC) in September.
The speech went down well on Wall Street, with the Dow rising 1.21 percent, the S&P 500 up 1.51 percent and the Nasdaq jumping 2.49 percent.
Bernanke also said that he expected second-half growth in the United States to improve after a virtually stagnant first six months.
“I’m pleased to see a sensible reaction in the market,” Christopher Macdonald, principal investment adviser at RBS Morgans in Sydney, told Dow Jones Newswires.
“Bernanke seems to have put a floor under the market by implying that if we get any bad news or further dislocation in the markets, they will put something together in their next (FOMC) meeting,” he said.
Tokyo suffered late selling pressure as dealers absorbed the results of the leadership election for the Democratic Party of Japan, which Noda won in a run-off against trade and industry minister Banri Kaieda.
Analysts said the move could weigh on stocks in the short term as Noda is in favor of raising taxes, which some fear could hurt the economy’s growth prospects.
Yutaka Shiraki, senior equity strategist at Mitsubishi UFJ Morgan Stanley Securities, said: “The fact that Noda was able to win so many votes reflects a wider-than-expected support for a tax hike within members of the Democratic Party of Japan.”
The dollar was weighed by the prospect of future monetary easing by the Fed, with the currency falling to 76.65 yen on Friday from 77.45 yen the day before.
However, it was holding firm Monday, buying 76.63 yen.
The euro was worth $1.4530, slightly up from $1.4490 in New York late Friday. It was at 111.32 yen from 111.10.
The dollar rose to 0.8130 Swiss francs from 0.8063 francs. Along with the yen, the Swiss franc is considered another safe-haven currency and has soared during the recent market tumult, to the consternation of Swiss authorities.
Oil prices were mixed as energy demand was hit by the closure of refineries and airports as Hurricane Irene struck the US east coast.
New York’s main contract, light sweet crude for delivery in October, inched up 15 cents to $85.52 a barrel while Brent North Sea crude for October sank 37 cents to $110.99.
Gold closed at $1,821-$1,822 an ounce in Hong Kong, up from Friday’s close of $1,789-$1,790.
In other markets:
— Indian shares jumped 3.58 percent, snapping three days of losses, on buying in index heavyweights.
The benchmark 30-share Sensex on the Bombay Stock Exchange closed up 567.5 points to 16,416.33, rebounding from near 19-month-low levels last Friday.
India’s largest IT outsourcer TCS rose 7.78 percent or 73.85 rupees to 1,023 and the world’s seventh largest steel maker Tata Steel jumped 6.45 percent to 449.5.
— Singapore closed up 1.59 percent, or 43.71 points, at 2,791.89.
DBS Group gained 1.17 percent to 12.96 and CapitaLand added 1.61 percent to 2.53.
— Taipei jumped 1.79 percent, or 132.91 points, to 7,578.01.
Taiwan Semiconductor Manufacturing Co was 2.21 percent higher at Tw$69.4 while Taiwan Cement added 5.96 percent to Tw$37.35.
— Wellington rose 0.31 percent, or 10.37 points, to 3,306.00.
Telecom added 0.9 percent to NZ$2.77 and Goodman Property rose 1.0 percent to NZ$0.98.
— Bangkok gained 1.77 percent, or 18.41 points, to end at 1,055.63.
— Kuala Lumpur, which was open for just half a day ahead of festive holidays, closed higher.
The market ended 0.17 percent, or 2.46 points, up at 1,447.27.
— Manila and Jakarta were closed for a public holiday.
