The markets across Asia-Pacific region ended sharply higher on Thursday on expectations of a recovery in the global economy. Better-than-expected economic data from the U.S and positive comments by U.S. Treasury Timothy Geithner that global economies are responding positively to the stimulus packages may allay fears of a protracted contraction.
In the U.S., a smaller-than-expected decline in construction spending for February, an increase in the index of pending home sales for February and a better-than-expected manufacturing sector index of the ISM for March more than offset the bigger-than-expected decline in non-farm private employment for March. Auto sales for March were also better than expected. Reacting to the positive data, on Wednesday, the Dow closed up 153 points or 2.01% at 7,762, the Nasdaq gained 23 points or 1.51% to 1,552, and the S&P 500 added 13 points or 1.66% to finish at 811.
In Asian trading, crude oil gained moderately in electronic trading. Light sweet crude for May delivery closed at $48.39 per barrel on the New York Mercantile Exchange on Wednesday, down $1.27 a barrel, after hitting an intraday high of $48.96 and a low of $47.26, after an Energy Information Administration data revealed a build in crude oil stockpiles from last week.
In Tokyo, the benchmark Nikkei 225 Index gained 367.87 points, or 4.4%, to 8,720, and the broader Topix index of all First Section Issues advanced 32.87 points, or 4.14% to 827.
On the economic front, the Bank of Japan said Thursday that the monetary base in Japan was up 6.9% year-over-year in March to 94.46 trillion yen. That's up from 93.65 trillion yen in February, which saw a 6.4% annual increase. Seasonally adjusted, the monetary base was up 5.6% month-over-month at 94.3 trillion yen. Through the first three months of 2009, the monetary base was up an annual 5.7% and a seasonally adjusted 17.2% compared to the previous quarter.
In another release, the Ministry of Finance said that Japanese investors bought a net 663.1 billion yen in foreign bonds and also purchased a net 246.4 billion yen in foreign stocks for the week ending March 28. Meanwhile, foreigners sold a net 189.7 billion yen in Japanese stocks and also sold a net 719.8 billion yen in foreign bonds.
Automobiles, exporters and financials led the gains in the market. Honda Motor advanced 10.83%, Hino Motors gained 10.53%, Nissan Motor Company soared 13.77% and Toyota Motor added 5.50%.
Exporters gained on hopes of a revival in the U.S. economy. Canon gained 3.97%, Sony soared 9.18% and Sharp added 4.02%.
Positive comments from U.S. Treasury Timothy Geithner propped up the financials. Mitsubishi UFJ, Japan's biggest bank, advanced 6.67%, Mizuho Financial surged up 8.97%, Sumitomo Mitsui gained 7.41% and Resona Holdings added 4.53%.
The moderate rebound in crude oil prices helped a rally in oil stocks. Inpex gained 1.55%, Nippon Oil edged up 0.20% and Showa Shell added 0.21%.
Among trading houses, Mitsubishi Corp. gained 3.52%, Sumitomo Corp. advanced 4.39% and Itochu soared 5.05%.
In Australia, the benchmark S&P/ASX 200 index advanced 2.81% or 100.2 points to 3,680, and the broader All Ordinaries index gained 2.7% or 95 points, to 3,622.
On the economic front, the Australian Bureau of Statistics data showed that Australia posted a better-than-expected trade surplus of A$2.11 billion on a seasonally adjusted basis in February. Exports jumped 4% from the previous month, while imports were down 1% on month.
Financial stocks advanced on Geithner's comments. National Australia Bank advanced 5.51%, ANZ Banking Group moved up 2.71%, Commonwealth Bank of Australia rose 1.85% and Westpac Banking gained 2.73%. Investment bank Macquarie Group surged up 6.02%.
In the resources sector, index leader BHP Billiton gained 3.58% and Rio Tinto advanced 4.78%. The second largest steel maker in the country, OneSteel soared 8.45% following a brokerage upgrade of the stock. Scrap-metal recycling company Sims Metal Management rose 6.61%.
Gold miners advanced after gold closed modestly higher for a second straight session on Wednesday. Lihir Gold moved up 0.90%, Sino Gold added 3.58%, and Newcrest Mining gained 2.22%.
Energy stocks ended mixed. While Woodside added 1.82%, Oil Search lost 1.92%, and Santos declined 1.68%.
Media-related stocks also advanced. Consolidated Media added 4.33% and Fairfax gained 0.95%. News Corp. shares soared 6.52%.
In the retail sector, David Jones advanced 1.78%, Woolworths moved up 0.78%, and Coles' owner Wesfarmers gained 3.14%.
The benchmark Hang Seng Index soared more than 1,000 points or 7.41% to close at 14,522.
Forty of the forty-two index components posted gains during the trading session on positive sentiment that the global economy might be on a recovery path and the worst is over.
Banking stocks ended sharply higher. HSBC Holdings gained 15.29%, Bank of Communications advanced 7.63% and Bank of East Asia surged up 8.51%. Other banking stocks also ended in positive territory. Among insurance stocks, Ping An gained 9.20% and China Life advanced 5.88%.
Property stocks ended sharply higher. The major gainers in the property space included Hang Lung Property New World Development, Swire Pacific, MTR Corp., Shopping Property, and Sino Land.
Among resource stocks, Aluminum Corp. of China, or CHALCO, rose 9.51%, CNOOC gained 4.57% and Petro China advanced 5.56%.
China-related stocks also ended higher. China Overseas soared 10.58%, China Mercantile Holdings advanced 6.07% and China Resources edged up 0.68%.
In Seoul, the benchmark KOSPI Index gained 3.54% or 43.61 points to 1,277.
A report released by the National Statistics Office on Wednesday revealed that South Korea's consumer prices grew at a slower pace in March compared to the same period last year. The consumer price index rose 3.9% during March, lower than the 4.1% rise reported in the same period last year. In comparison to February, the prices rose 0.7%, the report revealed.
Almost all the stocks across the sectors ended higher. Among the automakers, Hyundai Motor gained 4.48%, Kia Motor added 3.02% and Ssangyong Motor rose 4.00%
Financials also ended higher. KB Financial Group, the holding firm of Kookmin Bank, surged 6.82%, Shinhan Financial soared 7.77% and Woori Finance gained 7.72%.
Among shipbuilders, Hyundai Heavy Industries gained 5.22%, Samsung Heavy Industries advanced 3.82%, and Daewoo Shipping added 5.63%.
Market heavyweight Samsung Electronics gained 3.63%. Among technology stocks, Hynix Semiconductor rose 3.67%, LG Electronics advanced 3.89%, and LG Display gained 5.04%.
Among the other markets in the region, China's Shanghai Composite Index advanced 0.72% or 17.27 points, to 2,425, Indonesia's Jakarta Composite Index gained 2.60% or 37.98 points to 1,500, Singapore's Strait Times Index added 101.08 points, or 5.94% to 1,803, and Taiwan's Weighted Index moved up 159.33 points, or 3.00% to 5,474.
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