Bernanke comments boost Asian markets
HONG KONG—Asian markets mostly rallied on Tuesday after Federal Reserve Chairman Ben Bernanke warned the US economy was still fragile and the bank would keep easy monetary policy in place.
While his comments played down recent strong jobs growth figures, traders on Wall Street jumped on them, and the prospect of more dollars floating around the market sent the greenback lower against the euro.
Tokyo surged 2.36 percent, or 236.91 points, to 10,255.15, its highest level since the quake-tsunami on March 11 last year.
Sydney rose 0.90 percent, or 38.5 points, to 4,301.3 and Seoul climbed 1.02 percent, or 20.57 points, to 2,039.76.
Hong Kong jumped 1.83 percent, or 378.05 points, to 21,046.91 but Shanghai closed 0.15 percent, or 3.42 points, lower at 2,347.18 due to ongoing concerns over China’s economy.
Bernanke said Monday that the central bank would likely keep stimulative policies in place despite improvements to the job market.
“A wide range of indicators suggest that the job market has been improving, which is a welcome development indeed,” he said in a speech on the outskirts of Washington.
However, he said “conditions remain far from normal,” adding that “we cannot yet be sure that the recent pace of improvement in the labor market will be sustained.”
“Improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies,” he said.
The Fed has held interest rates at record lows since the global financial crisis while it has also bought US bonds to force down long term rates.
There had been talk that recent falls in unemployment could lead the bank to start tightening policy as early as the second half of this year.
“Basically Bernanke lit a flame under the market and we’ve seen risk on,” said Macquarie Equities Investment Advisor Brad Gordon in Auckland, according to Dow Jones Newswires.
On Wall Street the Dow rose 1.23 percent, the S&P 500 gained 1.39 percent and the tech-rich Nasdaq added 1.78 percent.
The euro surged against the dollar in New York trade, with the European unit also getting support from the closely watched Ifo index of business confidence, which rose for a fifth straight month to its highest level since July 2011.
The common currency jumped to $1.3356 late Monday, from $1.3262 earlier in Asia.
In early trade in Europe on Tuesday it was at $1.3380. It was also at 110.71 yen, compared with 110.68 yen. The dollar was at 82.77 yen from 82.87 yen.
On oil markets New York’s main contract, West Texas Intermediate (WTI) crude for delivery in May, added 35 cents to $107.38 per barrel while Brent North Sea crude for May settlement was up 13 cents at $125.78.
Gold was at $1,693.45 an ounce at 0945 GMT, compared with $1,661.40 late Monday.
In other markets:
— Singapore closed up 1.49 percent, or 44.41 points, at 3,018.91.
Palm-oil producer Wilmar International gained 1.41 percent to Sg$5.02 while Singapore Airlines was up 0.09 percent at Sg$10.77.
— Taipei ended 0.78 percent, or 61.84 points, higher at 8,029.46.
Taiwan Semiconductor Manufacturing Co. rose 2.63 percent to Tw$85.8 while leading smartphone maker HTC was 0.32 percent lower at Tw$631.0.
— Manila closed 0.96 percent, or 48.47 points, higher at 5,078.10.
Philippine Long Distance Telephone rose 0.08 percent to 2,670 pesos, SM Investments gained 3.04 percent to 660 pesos and JG Summit Holdings jumped 4.66 percent to 29.20 pesos.
— Wellington rose 0.35 percent, or 12.05 points, to 3,483.96.
Fletcher Building added 1.8 percent to NZ$6.99 and Telecom gained 3.1 percent to NZ$2.47 while Fisher & Paykel Healthcare slipped 2.6 percent to NZ$2.21.
— Kuala Lumpur added 0.32 percent, or 5.12 points, to 1,588.10.
Plantation firm Kuala Lumpur Kepong rose 0.8 percent to 24.06 ringgit, while rival IOI Corp. added 0.6 percent to 5.37 ringgit. Budget carrier AirAsia lost 3.2 percent to 3.35 ringgit.
— Jakarta rose 1.18 percent, or 47.68 points, to 4,079.38.
Hero Supermarket rose 19.85 percent to 23,250 rupiah, Gudang Garam gained 3.86 percent to 53,800 rupiah, and Sinar Mas Agro Resources added 3.17 percent to 6,500 rupiah.
— Bangkok added 1.60 percent, or 18.97 points, to 1,207.29.
PTT gained 2.30 percent to 356 baht, while Siam Cement added 1.12 percent to 360 baht.
— Mumbai rose 1.20 percent, or 204.58 points, to end at 17,257.36.
