Asian shares mostly up on Fed move, US bank test

Hong Kong—Asian markets mostly rose Wednesday after the Dow on Wall Street hit a more than four-year high, while the US Fed gave an upbeat assessment of the economy and top US banks passed crucial stress tests.

The dollar soared to an 11-month high above 83 yen, sending Tokyo shares surging, while the sense of optimism was boosted by a surprise move by Fitch to raise Greece’s credit rating out of default.

Tokyo jumped 1.53 percent, or 151. 44 points, to 10,050.52 – its first close above 10,000 since July – while Sydney gained 0.93 percent, or 39.6 points, to 4,287.2 and Seoul rose 0.99 percent, or 20.04 points, to 2,045.08.

However, Hong Kong and Shanghai gave up their early gains to end in negative territory after Chinese Premier Wen Jiabao warned of a risk of a property bubble, denting hopes of an easing of tight real estate rules.

Hong Kong closed 0.15 percent, or 31.81 points, lower at 21,307.89 and Shanghai tumbled 2.63 percent, giving up 64.57 points to 2,391.23.

Traders were given a strong lead by the Dow Jones Industrial Average, which jumped 1.68 percent to 13,177.68 – its best finish since December 31, 2007 – thanks to a string of good news.

The US central bank, following its monthly policy meeting Tuesday, upgraded its view of the world’s No. 1 economy, saying the jobs market and consumer and business spending had improved since January.

While acknowledging it was still facing problems, the Fed, which kept interest rates on hold at record lows, said: “Labor market conditions have improved further; the unemployment rate has declined notably in recent months but remains elevated.”

“Strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook.”

The comments contrasted with the downbeat tone of Fed chairman Ben Bernanke in testimony to Congress on February 29, when he said consumer sentiment and spending capability remained weak and was holding back the economy.

The statement came as another batch of data showed retail sales surged 1.1 percent month on month in February, the fastest pace in five months. Consumer spending accounts for about 60 percent of gross domestic product in the United States.

Sentiment in the financial sector was also lifted after the Fed said 15 US banks, including JPMorgan Chase and Wells Fargo, had passed tests to see if they would be able to withstand another economic meltdown.

The move allowed the banks to announce a surge in dividend payments.

On currency markets the dollar briefly rose to 83.50 yen in Tokyo, its highest since April, before settling back to 83.45 yen in the afternoon.

The greenback was trading at 82.90 yen in New York late Tuesday.

The sell-off in the safe-haven yen suggested increasing optimism about the global economy, said Jonathan Lewis, chief investment officer at Samson Capital Advisors in New York. “If you’re not worried, what do you need a safe-haven for?” he asked.

And Barclays Capital said the greenback could reach 84 yen within a month and 88 yen over the next few months.

European concerns eased further when Fitch Ratings upgraded Greece to “B-” with a stable outlook from restricted default after its successful bond swap with private creditors last week that wiped around 100 billion euros off its debt.

It said the move “significantly improved Greece’s debt service profile and reduced the risk of a recurrence of near-term repayment difficulties on the new Greek government securities.”

The euro bought $1.3066 and 109.03 yen in early European trade on Wednesday, compared with $1.3075 and 108.38 yen in New York late Tuesday.

On oil markets New York’s main contract, light sweet crude for delivery in April was down 30 cents to $106.41 while Brent North Sea crude for April delivery shed 41 cents to $125.81.

Gold was at $1,659.39 an ounce at 1100 GMT, compared with $1,662.05 early Wednesday.

In other markets:

— Singapore was 1.25 percent higher, adding 37.33 points to 3,026.40.

Oversea-Chinese Banking Corp. gained 1.12 percent to Sg$9.00 while shipping line Neptune Orient Lines gained 2.51 percent to Sg$1.43.

— Taipei rose 1.17 percent, or 93.75 points, to 8,125.26.

TSMC gained 2.34 percent to Tw$83.2 while Chunghwa Telecom was 0.44 percent higher at Tw$91.8.

— Manila rose 0.90 percent, or 45.24 points, to 5,050.99.

Philippine Long Distance Telephone added 0.4 percent to close at 2,770 pesos and Aboitiz Equity Ventures added 0.8 percent to 48.70 pesos.

— Wellington rose 0.81 percent, or 28.18 points, to 3,498.99.

Fletcher Building was up 1.33 percent at NZ$6.85, Telecom Corp. gained 0.61 percent to NZ$2.475 and Air New Zealand rose 1.16 percent to NZ$0.87.

— Kuala Lumpur added 0.75 percent, or 11.69 points, to 1,575.71.

Plantation firm Sime Darby gained 0.21 percent to 9.71 ringgit, budget carrier AirAsia added 1.41 percent to 3.59 ringgit and automaker DRB-HICOM lost 0.75 percent to 2.64 ringgit.

— Jakarta rose 1.14 percent, or 45.68 points, to 4,054.33.

— Bangkok rose 0.94 percent, or 10.80 points, to 1,164.36.

Banpu gained 1.66 percent to 612 baht, while PTT added 1.75 percent to 348 baht.

— In Mumbai, shares rose 105.68 points, or 0.59 percent, to 17,919.3, a fourth straight day of gains, as global stocks rose amid an upbeat assessment for the US economy.

Originally posted at 12:11 pm | Wednesday March 14, 2012