Asia shares surge after Wall St. rally

People are reflected on the electronic board of a securities firm in Tokyo on Monday, Oct. 20, 2014. Asian stock markets rose Monday, led by an almost 4 percent surge in Japan, as nerves about the outlook for the world economy steadied after big gains on Wall Street. AP PHOTO/KOJI SASAHARA

HONG KONG–Asian markets rallied Monday following a rise in New York at the end of last week, with Tokyo surging almost four percent thanks also to a weaker yen.

But while the gains come as some relief after the ups and downs of last week, traders are nervously watching the release of Chinese economic growth data later in the week for fear of another weak figure.

Tokyo, which ended Friday at a five-month low, raced 3.98 percent higher in the biggest one-day points gain since June 2013. It added 578.72 points to finish at 15,111.23.

Sydney jumped 0.90 percent, or 47.7 points, to 5,319.4 and Seoul added 1.55 percent, or 29.40 points, to 1,930.06.

Shanghai finished 0.66 percent higher, adding 15.54 points, to 2,356.73, and Hong Kong put on 0.20 percent, or 47.05 points, to end at 23,070.26.

Investors took their lead from Wall Street, where the three main indexes saw healthy advances Friday on bargain-buying and following upbeat earnings reports from General Electric and Morgan Stanley.

The Dow added 1.63 percent, the S&P 500 jumped 1.29 percent and the Nasdaq gained 0.97 percent.

Adding to buying sentiment were comments from officials at the US and British central banks.

On Thursday James Bullard, head of the St Louis branch of the Federal Reserve, suggested it could extend its bond-buying programme rather than winding it down, as had been expected.

And on Friday Bank of England chief economist Andrew Haldane said recent economic weakness implied the need for a slower approach to raising rates.

The two banks have in the past few months been considering raising interest rates as their respective economies have slowly been picking up. However, that has spooked traders as other economies, including the eurozone, China and Japan, have been struggling.

‘Markets far from stable’

There was also support from reports at the weekend that China’s central bank plans to inject 200 billion yuan ($32.6 billion) into the banking system after a recent spate of monetary easing failed to kickstart the Asian economic giant.

On foreign exchange markets the dollar climbed to 107.10 yen, compared with 106.78 yen in New York and well up from the 106.22 yen earlier Friday in Asia.

The euro fetched 136.66 yen against 136.28 yen in US trade, while it was at $1.2768 compared with $1.2759.

However, there are still ongoing worries about the world economy.

Naoki Fujiwara, fund manager at Shinkin Asset Management, said: “Global markets, faced with renewed slowdown fears, are far from stable, and will only recover if and when economic growth data and policy directives are reassuring enough to entice investors out of their current ‘risk-off’ mode. Stock prices are cheap, but can get cheaper still.”

Eyes are now on China, which releases third-quarter gross domestic product data Tuesday. There are expectations for another weak reading following a recent string of underwhelming reports, including on industrial output, inflation and trade.

“There is a broad consensus that growth decelerated to its slowest pace since the Great Recession,” said Credit Agricole.

“China activity data, especially Q3 GDP, are unlikely to bring much cheer to nervous markets.”

Oil prices enjoyed some more minor gains, although they are still sitting at multi-year lows. US benchmark West Texas Intermediate for delivery in November climbed 44 cents to $83.19 a barrel in afternoon trade, and Brent crude for December added two cents to $86.18.

Gold was at $1,244.57 an ounce against $1,236.20 late Friday.

In other markets:

— Bangkok closed down 0.13 percent, or 2.04 points, to 1,526.67.

Telecoms company True Corporation fell 3.60 percent to 10.70 baht, while Kasikorn Bank rose 3.59 percent to 231 baht.

— Jakarta rose 0.23 percent, or 11.59 points, to close at 5,040.53.

Cement manufacturer Indocement Tunggal Prakarsa gained 3.60 percent to 23,725 rupiah, while cigarette maker Gudang Garam slipped 2.02 percent to 59,275 rupiah.

— Kuala Lumpur closed 0.82 percent higher, or 14.83 points, to end at 1,803.14.

Telekom Malaysia added 0.3 percent to 6.86 ringgit, while utility Tenaga Nasional rose 0.3 percent to 12.56. Palm oil giant Sime Darby fell 0.1 percent to 9.16 ringgit.

— Manila closed 0.78 percent higher, or 54.31 points, higher at 7,057.53.

Energy Development Corp. jumped 3.97 percent to 7.60 pesos but Philippine Long Distance Telephone fell 0.31 percent to 3,172 pesos.

— Taipei advanced 1.77 percent, or 150.26 points, to 8,663.14.

Taiwan Semiconductor Manufacturing Co. closed up 2.02 percent at Tw$126.0, while Hon Hai Precision Industry gained 4.72 percent to Tw$93.2.

— Singapore closed 0.42 percent, or 13.32 points, higher at 3,181.05.

Property developer CapitaLand fell 0.68 percent to close at Sg$2.94 and Singapore Telecom added 0.82 percent to finish at Sg$3.68.

— Wellington rose 0.99 percent, or 50.94 points, to 5,197.89.

Fletcher Building ended up 2.12 percent at NZ$8.66 and Contact Energy added 1.36 percent to NZ$5.98.

– Mumbai closed up 1.23 percent, or 321.32 points, at 26,429.85 points.

– Tata Motors was up 3.94 percent at 494.50 rupees and Reliance Industries was down 0.39 percent at 934.50 rupees.–With a report from Dow Jones Newswires