Asian stocks rally on hopes for China eurozone help
HONG KONG—Asian markets soared Wednesday with Tokyo and Hong Kong hitting six-month highs, after China said it may dig into its massive foreign exchange reserves to help out debt-battered Europe.
Tokyo’s benchmark index soared 2.30 percent, or 208.27 points, to its highest close since August at 9,260.34, after the Bank of Japan on Tuesday said it would pump another $130 billion into the country’s anemic economy.
Hong Kong, led by property developer shares on optimism for the city’s real estate market, added 2.14 percent, or 447.4 points, to 21,365.23, the Hang Seng index’s highest close since early August.
India’s Sensex index also hit a half-year high, ending 1.98 percent, or 353.84 points higher at 18,202.41, buoyed by foreign fund inflows and an easing of inflationary pressures.
Seoul finished up 1.13 percent, or 22.68 points, at 2,025.32, Sydney inched up 0.25 percent, or 10.6 points, at 4,253.4, while Shanghai shares gained 0.94 percent, or 21.93 points, to 2,366.70.
Comments Wednesday by People’s Bank of China governor Zhou Xiaochuan that China was ready to get more involved in efforts to resolve Europe’s debt crisis gave a boost amid continuing uncertainty over the continent’s fiscal woes.
“We saw a big spike (after Zhou) came out and said they are going to take an even larger role in Europe’s recapitalisation,” said Peter Esho, strategist at City Index.
“The market just got a lot of confidence from that,” he told Dow Jones Newswires.
Zhou’s comments echoed those of Premier Wen Jiabao one day earlier, who said Beijing may help prop up Europe, which is China’s biggest export market.
However, the continent’s debt saga was dealt another blow Tuesday when Jean-Claude Juncker, head of the group of eurozone finance ministers set to approve a Greek rescue fund, said he did not have the “political assurances” from Athens to green light the desperately needed rescue package.
The 17-nation eurozone had demanded that Greece’s finance minister come to Brussels with an extra 325 million euros ($425 million) in budget cuts and written pledges from politicians to implement EU-ordered austerity measures.
Juncker switched a meeting scheduled for later Wednesday to a conference call instead and prepared for previously scheduled talks in Brussels on Monday.
“I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program,” he said.
Late Sunday, Greek lawmakers pushed through a package of deeply unpopular budget cuts that sparked violent street battles between police and protesters numbering in the tens of thousands.
That was followed by Moody’s chopping the credit ratings of six European nations, including Italy and Spain, while warning that its top ratings on Austria, France and Britain were also at risk.
On Wednesday, South Korea’s Samsung Electronics said it was considering spinning off its loss-making liquid crystal display business, sending its shares to a record high of 1,135,000 won ($1,012).
Wall Street was mixed on Tuesday with the Dow Jones Industrial Average inching up 0.03 percent, the broad-based S&P 500 closing down 0.09 percent, and the tech-heavy Nasdaq Composite adding 0.02 percent.
The see-saw performance came as the US Commerce Department said January retail sales rose by 0.4 percent from December, the biggest gain since October. But the increase was only half as large as analysts had expected.
Investors took some cheer as the ZEW think tank’s widely watched barometer of German investor confidence surged to its highest level in 10 months.
It is the first time since May 2011 that the index has been in positive positive territory.
European markets rose in early trade Wednesday with London’s FTSE 100 up 0.23 percent, Frankfurt’s DAX 30 adding 1.18 percent, and the Paris CAC 40 climbing 0.70 percent.
In foreign exchange markets, the yen earlier fell to a fresh three-month low against the dollar after Tokyo announced the additional easing measures.
The dollar rose to 78.67 yen at one point Wednesday morning – its highest level since November 1 – from 78.44 yen late Tuesday in New York, before easing slightly to sit at 78.51 yen.
The euro was at $1.3176 and 103.44 yen, from $1.3130 and 103.15 yen in New York.
New York’s main oil contract, light sweet crude for delivery in March, shed three cents to $101.67, while Brent North Sea crude for April delivery lost 14 cents to $118.10.
Gold was at $1,727.08 an ounce at 1005 GMT, against $1,721.10 in New York.
In other markets:
— Taiwan shares rose 1.54 percent, or 121.16 points, to 8,005.24.
Hon Hai Precision added 2.48 percent at Tw$103.5 while Taiwan Semiconductor Manufacturing Co. was 1.55 percent higher at Tw$78.5.
— Singapore gained 0.81 percent to 3,011.68.
Singapore Airlines rose 0.37 percent to Sg$10.98 and City Developments was 1.58 percent up at Sg$10.94.
— Kuala Lumpur was down 0.30 percent, or 4.75 points, at 1,561.30.
Hong Leong Bank shed 0.7 percent to 11.62 ringgit, MMC Corp. lost 1.4 percent to 2.86, while Telekom Malaysia gained 0.4 percent to 4.83 ringgit.
— Indonesian shares gained 0.01 percent, or 0.22 points, to 3,953.04.
Semen Gresik rose 0.87 percent to 11,650 rupiah, Timah gained 0.52 percent to 1,940 rupiah, while Astra Agro Lestari added 0.22 percent to 22,550 rupiah.
— Philippine shares were flat, edging down 0.07 percent, or 3.46 points, at 4,772.47.
Metropolitan Bank and Trust gained 1.23 percent to 82 pesos while Philippine Long Distance Telephone rose 0.07 percent to 2,746 pesos.
— Bangkok rose 1.81 percent, or 20.07 points, to 1,126.48.
Banpu edged up 0.32 percent to 628 baht, while PTT added 1.78 percent to 344 baht.
— Wellington shares closed down 1.1 percent, or 36.46 points, at 3,293.87.
Carpet maker Cavalier slumped 17.4 percent to NZ$1.90 after warning its first-half profit would fall 59 percent, casino operator Sky City slipped 1.4 percent to NZ$3.59, while Fletcher Building was down 2.7 percent to NZ$6.53.
