Asian stocks rally on central bank offensive

Sep 16, 2011



Asian stocks rally on central bank offensive





Asia-Pacific stock markets extended a global rally Friday after the world's most powerful central banks offered to inject US dollars into lenders squeezed by the eurozone debt crisis.

The European Central Bank and its US, Japanese, Swiss and British counterparts announced Thursday they would act in concert to lend dollars to banks facing a shortage of the American currency.

The move sent European stocks soaring and helped Wall Street stay in positive territory for the fourth day in a row, with the Dow Jones Industrial Average closing up 1.66 percent at 11,433.18.

Asian shares followed the lead. Japan's Nikkei jumped 2.25 percent, or 195.30 points, to close at 8,864.16.

Hong Kong's Hang Seng Index closed 273.81 points (1.43 percent) higher at 19,455.31. In Australia, the S&P/ASX 200 rallied 1.91 percent, or 77.7 points, to end at 4,149.4, while the broader All Ordinaries closed up 1.85 percent.

South Korea's benchmark KOSPI index soared 3.72 percent, or 66.02 points, to 1,840.10.

Shanghai's composite index gained 0.13 percent, or 3.29 points to 2,482.34.

"What was good about the liquidity announcement is that the (European Central Bank) has got ahead of the game," said CMC Markets chief market strategist Michael McCarthy.

"By acting decisively, they have averted what could have been a US dollar funding crisis," he told Dow Jones Newswires.

But the European debt crisis is still weighing on investors, Commsec market analyst Steven Daghlian said in Australia.

"Even when you take into account the gains we've seen over the past couple of days in Australia, the All Ords Index is still down about 14 percent this year and we lost about five percent in September, so we still have a long way to go," Daghlian said.

The euro held on to gains it had clocked up in New York late on Thursday after plunging earlier this week.

It was fetching $1.3805 in late afternoon Asian trade, compared with $1.3882 late Thursday in New York where the common European currency jumped after the move to aid Europe's struggling banks.

The euro also stood at 105.90 yen from 106.40 yen in New York.

In Asia on Thursday the common currency had been sitting at $1.3720 and 105.20 yen, while on Monday it was foundering at around $1.3500 and a 10-year low below 104 yen.

The dollar bought 76.70 yen, slightly firmer than 76.66 in New York Thursday.

Safe-haven gold was also losing its lustre as risk appetite picked up. At 0955 GMT, the precious metal was trading at $1,776.40 per ounce, well down from the $1,810.00 it sat at late Thursday.

Gold has suffered heavy selling since peaking at a record high $1,913.50 towards the end of last month.

On oil markets New York's main contract, light sweet crude for delivery in October, was down three cents at $89.37 in afternoon trade and Brent North Sea crude for October climbed 81 cents to $113.11.

In other markets:

-- Singapore rose 0.83 percent, or 23.09 points, to close at 2,789.04.

Container shipping firm Neptune Orient Lines was up 0.90 percent at Sg$1.12 and property developer CapitaLand eased 0.39 percent to Sg$2.54.

-- Taipei jumped 2.60 percent, or 191.72 points, to 7,577.40.

HTC was up 3.28 percent at Tw$788.0 while Taiwan Semiconductor Manufacturing Co rose 2.89 percent to Tw$71.1.

-- Manila was virtually unchanged, edging down 1.23 percent to 4,290.17.

SM Investments dipped 0.9 percent to 555 pesos, Lepanto Mining shot up 6.1 percent to 1.39 pesos and SM Prime gained 0.7 percent to 13.00 pesos.

-- Wellington closed 0.62 percent, or 20.18 points, higher at 3,292.68.

Telecom jumped 1.8 percent to NZ$2.58 and Fletcher Building was up 1.2 percent at NZ$7.59. Sky City gained 2.1 percent to NZ$3.48.

-- Jakarta rose 1.61 percent, or 60.85 points, to 3,835.18.

Coal miner Bumi Resources rose 3.9 percent to 2,700 rupiah, while noodle maker Indofood jumped 3.7 percent to 5,650 rupiah.

-- Bangkok edged down 0.28 percent or 2.87 points to 1,033.34.

PTT lost 6.00 baht to 310.00, while Banpu dropped 2.00 baht to 626.00.

-- Mumbai rose 0.34 percent or 57.29 points to 16,933.83, shrugging off another interest rate hike from the central bank.

The Reserve Bank of India raised rates for the 12th time in 18 months to combat near double-digit inflation, despite signs of slowing economic growth.

-- Kuala Lumpur was closed for a public holiday.

Source: AFP Asian Edition

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