Asian markets gain after Japan’s industrial production rise

Asian markets gain after Japan’s industrial production rise
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First Published: Fri, May 29 2009. 11 27 AM IST
Updated: Fri, May 29 2009. 11 27 AM IST
Hong Kong: Asian stocks were modestly higher after Japanese industrial production jumped at its fastest pace in 56 years, in the latest sign recession was easing in major economies.
But trading was tepid as many investors held back because of doubts about how much longer the aggressive run in world stock markets this spring can last. Among the day’s best performers were resource producers like oil firms, lifted by stronger commodity prices.
In Japan, industrial output jumped 5.2% in April, the government said, as companies raised production following drastic cutbacks because of the unprecedented drop in demand late last year.
It was evidence that manufacturers in the world’s second largest economy are starting to heal amid the country’s steepest recession since World War II. Still, a rise in Tokyo’s market was capped by other reports showed continuing pain for workers and consumers.
Markets could be directionless for now, analysts say, as a hesitancy among many investors to buy more stocks is offset by the massive liquidity brought on by stimulus spending and rock-bottom interest rates around the world.
“We’ve had such a good run and stocks don’t look cheap at this point anymore,” said Andrew Orchard, Asian strategist for Royal Bank of Scotland in Hong Kong. “But I think the liquidity is so strong that any bit of good news can get blown out of proportion and support prices right now.”
The Nikkei 225 stock average gained 43.15 points, or 0.5%, to 9,494.54 while Hong Kong’s Hang Seng added 82.04, or 0.5%, to 17,967.31.
South Korea’s Kospi was up 0.1% at 1,393.62. Australia’s key index both climbed 1.6%.
Financial markets in mainland China and Taiwan were closed on Friday for a holiday.
In New York on Thursday, the Dow rose 103.78, or 1.3%, to 8,403.80. The S&P 500 index rose 13.77, or 1.5%, to 906.83.
Wall Street was poised to give back some of its gains after US futures declined. Dow futures were down 17 points, or 0.2%, at 8,367 and S&P futures were little changed at 905.30.
Oil prices pulled back from a six-month high in Asia, with benchmark crude for July delivery down 16 cents to $65.24 a barrel. The contract rose $1.63 to settle at $65.08 overnight, boosted by a fall in US oil inventories and better economic news.
The dollar fell to 96.50 yen from 96.76 yen. The euro was higher at $1.3988 from $1.3939.
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First Published: Fri, May 29 2009. 11 27 AM IST
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