Asian Stocks Gain On Stimulus Measures Hope

   on July 03 2012 12:29 AM
A man looks at an electronic board at a brokerage house in Shanghai
A man looks at an electronic board at a brokerage house in Shanghai April 6, 2011. REUTERS

Asian markets rose Tuesday as investor confidence was boosted by expectation for stimulus measures from central banks globally.

The Chinese Shanghai Composite rose 0.71 percent or 15.83 points to 2241.94. Hong Kong's Hang Seng rose 1.44 percent or 279.15 points to 19720.61. Major gainers were HSBC Holdings PLC (1.24 percent) and Agricultural Bank of China Ltd (2.27 percent).

Japan's Nikkei Stock Average rose 0.76 percent or 68.69 points to 9072.17. Among major losers were Japan Tobacco Inc (3.22 percent), Mitsubishi UFJ Financial Corp (3.16 percent) and Nikon Corp (2.89 percent).

South Korea's KOSPI Composite Index rose 0.79 percent or 14.71 points to 1866.36. Shares of KEC Holdings Co Ltd climbed 14.71 percent and shares of LG Electronics Inc rose 2.95 percent.

India's BSE Sensex rose 0.51 percent or 87.94 points to 17486.92. Major gainers were GMR Infrastructure Ltd (1.95 percent), Syndicate Bank (1.32 percent) and ICICI Bank (1.21 percent).

Market sentiments were positive as investors sensed that central banks could announce monetary easing measures to strengthen the global economy. Investors feel that the signs of a faltering U.S. economic recovery, along with the fact that the euro zone economy continues to be under pressure, has increased the need for the Federal Reserve to announce more monetary stimulus urgently.

The fall in Institute of Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) to 49.7 in June down from 53.5 in May was taken as a sign that the U.S. is catching the slowdown already underway in Europe. The ISM noted that firms have major concerns about uncertainties in the economies in Europe and China.

Market participants feel that the weakening manufacturing sector will persuade the Fed to announce monetary easing measures to regain the economic growth momentum. Last month, the Fed decided to extend its so-called 'Operation Twist' bond-buying program until the end of 2012. But it did not announce any major stimulus measures.

Investors were also hopeful of monetary easing measures from China as data released earlier this week by the National Bureau of Statistics and China Federation of Logistics and Purchasing showed that the country's PMI declined to 50.2 in June from 50.4 in May.

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