The technology sector propelled Asian stocks on Wednesday after bellwether Intel Corp's
The tech-heavy markets in South Korea and Taiwan got a leg-up after the world's top chipmaker Intel unveiled sales and margin forecasts that trounced Wall Street expectations. Taiwan's TAIEX index <.TWII> was up 0.5 percent and the South Korean KOSPI <.KS11> rose 0.9 percent, off initial highs.
In Tokyo, gains in the technology sector helped overcome the drag provided by telecoms firm KDDI Corp's <9433.T> 1.5 percent drop. The Nikkei benchmark <.N225> was up 0.2 percent, just above the 14-day moving average.
The results and guidance reinforce the markets' belief that the global economy is recovering at a very fast pace and that is supportive of risk appetite trades across asset classes, said Dariusz Kowalczyk chief investment strategist at SJS Markets.
By mid-day the MSCI index of Asian shares outside Japan was up 0.9 percent with the technology index the biggest gainer rising 1.1 percent.
A host of Asian currencies made early gains after Singapore's central bank recentered its dollar policy band upwards and switched to a policy of modest and gradual appreciation for the currency.
The move, effectively a revaluation of the Singapore dollar, boosted the currency to a 20 month high of 1.3776 and triggered a rally in other Asian currencies amid widely held expectations that China will revalue the yuan.
All Asian currencies, besides the yen and the yuan, rose posting gains of between 0.1 percent and 1 percent after the move which came on the heels of data that showed the city-state's economy expanded at a record pace and faster than expected.
It's not just a Singapore story. It's Asia doing extremely well against the rest of the world. Singapore's data today confirms it, said Endre Pedersen, executive director of fixed income at MFC Global, who helps manage about $15 billion in Asian fixed income.
That shift in central focus to inflation from growth in Singapore renewed expectations Beijing will allow its yuan to rise to contain inflationary pressures in an accelerating economy.
Given the close links markets in Singapore have in relation to China, the Chinese central bank could take a cue from the MAS and move the currency to address rising prices as well, HSBC currency strategist Perry Kojodjojo said.
We think the initial stage of inflation is positive for Asian fx as it could mean central banks here will allow appreciation to combat rising prices, Kojodjojo said.
This gave a leg-up especially to Asian currencies considered proxy trades for the yuan including the Malaysian ringgit and the South Korean won.
The growth-linked Australian dollar, rose 0.3 percent following the Singapore central bank's move which came after data showed the economy expanded a stronger-than-expected 13.1 percent in the first quarter of 2010 from a year earlier.
The low-yielding yen, however, suffered losses as demand for riskier assets picked up on hopes of better earnings from the tech sector. The currency fell most against the Aussie dollar which rose 0.4 percent against the yen.
The euro, which is still enjoying a rebound stemming from short-covering after a rescue package for Greece at the weekend, rose 0.3 percent to $1.3654.
(Reporting by Umesh Desai; Editing by Sanjeev Miglani and Vikram S Subhedar)