Asian shares rise, emerging market fears ease

Women chat in front of a securities firm in Tokyo, Wednesday, Jan. 29, 2014. Asian markets rose on Wednesday following Wall Street’s lead, as tensions over emerging markets eased and ahead of a Federal Reserve decision on its stimulus program. AP PHOTO/SHIZUO KAMBAYASHI

HONG KONG—Asian markets rose on Wednesday following Wall Street’s lead, as tensions over emerging markets eased and ahead of a Federal Reserve decision on its stimulus program.

Tokyo stocks jumped 2.70 percent, or 403.75 points, to 15,383.91 as the dollar climbed and confidence rose after the central banks of India and Turkey increased interest rates, countering a sell-off in their currencies.

Seoul rose 1.26 percent, or 24.22 points, to 1,941.15 and Sydney finished 1.04 percent, or 53.9 points, higher at 5,229.0.

Hong Kong added 0.82 percent, or 180.97 points, to end at 22,141.61 and Shanghai rose 0.56 percent, or 11.40 points, to 2,049.91.

Taipei was closed for a public holiday.

With the stability of emerging economies back on the agenda, dealers are waiting to find out what the Fed plans to do with its huge stimulus program.

Last month the Fed said it would reduce the bond-buying by $10 billion a month to $75 billion from January, citing an improved US economy.

While it has been credited with fueling an investment boom in developing countries, there are fears that the removal of the cheap cash will lead to huge capital outflows.

Those fears were brought into focus last week when Argentina’s peso slumped 14 percent against the dollar, leading to a sell-off in the currencies of other emerging nations such as Indonesia, India and Thailand. That in turn sent global markets tumbling.

However, tensions eased somewhat on Tuesday after India and then Turkey—whose currencies have come under pressure—raised their borrowing rates.

The Reserve Bank of India lifted its benchmark repo rate, at which it lends to commercial banks, by 25 basis points to 8.0 percent. Hours later Turkey hiked its overnight lending rate to 12 percent from 7.75 percent.

The dollar eased to 2.1794 lira, down from 2.2520 lira before the announcement, and well off its 2.39 lira peak on Monday. The rupee was at 62.23 to the greenback on Wednesday, against levels around 63.20 previously.

A more upbeat outlook helped the dollar rise against the yen, which is considered a safer bet in times of uncertainty.

In afternoon Tokyo trade the dollar fetched 103.23 yen against 102.97 yen in New York Tuesday.

The euro inched up to 141.05 yen from 140.73 yen while also sitting at $1.3665 against $1.3667.

Daisuke Uno, strategist at Sumitomo Mitsui Banking Corp., told Dow Jones Newswires: “With Turkey and India raising interest rates and the US Fed set to make its decision on policy soon, markets are still cautious.”

He said there was a 70 percent chance the Fed would cut its stimulus but added that it may wait until the next meeting. “The central bank is walking a very narrow tightrope, and dares not further upset emerging markets.”

A rise in New York Tuesday helped Asian markets. The Dow rose 0.57 percent, ending a five-day losing streak, the S&P 500 increased 0.61 percent and the Nasdaq added 0.35 percent.

Data showed US consumers gained confidence in the economy for the second straight month in January, with rising expectations for overall growth and earnings gains.

The Conference Board said its Consumer Confidence Index rose to 80.7, up from 77.5 in December and far better than the 58.4 in January 2013.

Oil prices were mixed. New York’s main contract, West Texas Intermediate for March delivery, eased 28 cents to $97.13. Brent North Sea crude for March was up one cent at $107.42.

Gold fetched $1,257.11 at 1115 GMT, compared with $1,254.37 late Tuesday.

In other markets:

— Mumbai fell 0.18 percent, or 36.21 points, to 20,647.30 points.

Shares of Indian Overseas Bank fell 5.83 percent or 2.70 rupees to 43.65 rupees, while top carmaker Maruti Suzuki rose 7.11 percent or 111.15 rupees to 1,674.35 rupees a share.

— Kuala Lumpur gained 0.45 percent, or 7.98 points, to close at 1,789.23.

Shipping company MISC added 2.1 percent to 5.87 ringgit, while SapuraKencana Petroleum rose 1.6 percent to 4.38. Plantation giant IOI Corp. fell 0.5 percent to 4.15 ringgit.

— Bangkok slipped 0.03 percent, or 0.37 points, to 1,271.42.

Coal producer Banpu was unchanged at 26.50 baht while energy giant PTT Plc fell 1.44 percent to 274.00 baht.

— Jakarta ended up 1.74 percent, or 75.70 points, at 4,417.35.

Retailer Ramayana Lestari Sentosa rose 4.55 percent to 1,265 rupiah, while cigarette maker Hanjaya Mandala Sampoerna fell 0.15 percent to 65,950 rupiah.

— Singapore closed down 0.47 percent, or 14.48 points, at 3,047.93.

Oil rig maker Keppel Corp eased 0.75 percent to Sg$10.54 while DBS bank was down 0.78 percent to Sg$16.52.

— Wellington rose 0.71 percent, or 34.28 points, to 4,882.72.

Fletcher Building was up 1.48 percent to NZ$8.90 and Air New Zealand was down 1.16 percent at NZ$1.70.

— Manila added 0.78 percent, or 47.03 points, to 6,069.84.

Alliance Global ended 1.11 percent higher at 27.30 pesos and SM Prime Holdings was 2.15 percent up at 15.18 pesos, while Philippine Long Distance Telephone added 0.07 percent to 2,706 pesos.—Danny McCord