Hong Kong: Asian stocks hit their highest level in 13 months on Thursday on signs the global economic recovery could be strengthening, while the dollar slid to a fresh one-year low as investor optimism eroded its safe haven appeal.
Shares in Japan rose 1.7% as the Bank of Japan upgraded its view on the economy and a Reuters Tankan survey showed the mood among Japanese manufacturers this month at a one-year high.
China shares also rallied, with Shanghai stocks jumping 2%, as a senior Chinese government economist said China’s economy may regain double-digit annual growth in the fourth quarter. Stronger-than-expected growth though could also bring monetary tightening closer to the horizon.
Upbeat US industrial output data on Wednesday raised hopes that the pace of the global economic recovery was accelerating and kept up pressure on the US dollar as investors sought out riskier assets and higher-yielding currencies.
As the dollar continued to plumb one-year lows against a basket of currencies, the New Zealand dollar reached its highest level in more than a year while the Australian dollar hit a fresh one-year high as commodity prices gained ground.
“With risk appetite so strong, the dollar remains under broad-based pressure and we cannot see anything on the horizon to alter that today,” said Chris Turner, head of FX strategy at ING.
The MSCI index of Asia Pacific stocks traded outside Japan rose about 1.2%, coming off a tad in late trade from its highest level since August last year.
Hong Kong shares rose 1.7% to a new high for this year, led by banks.
Australian shares rose 1.4% while gains elsewhere in the region were more muted with Taiwan rising half a percent and India up 0.2%.
Reliance Industries, the heaviest stock in Mumbai’s 30-share SENSEX benchmark, fell 4.5 percent after the petrochemicals giant raised $660 million through a share sale.
Singapore shares closed a shade lower.
In South Korea, authorities were seen intervening for a second day after the won hit an 11-month high at 1,204.9.
Analysts say South Korea could be the first G20 country to tighten monetary policy, and strong sales reports from the country’s top three department stores were a further sign that Asia’s fourth-largest economy is picking up.
However, the finance ministry and the central bank offered differing views on how to manage the economy, underlining tension over the timing of an interest rate rise.
That took some steam out of the stock market and the Kospi index ended up 0.7%. Korean December treasury bond futures meanwhile turned slightly higher after the Ministry of Finance reaffirmed its opposition to an early exit from economic stimulus and warned that the economy faced high uncertainty.
“The finance minister’s comments gave some relief to debt investors while the waning strength in stock markets also helped,” said Kim Dong-whan at HI Investment & Securities.
Shares of Asian exporters were boosted by hopes that global demand may be improving with Japanese car maker Toyota Motor gaining 1.9% and electronics giant Sony Corp sprinting 2.4%. South Korea’s Hynix Semiconductor, the world’s No. 2 memory chip maker, saw its share price advance 0.7%.
Gold rose to $1,023 an ounce, its highest level since March 2008, as the dollar fell and shares of gold miners were in demand, with Australia’s Newcrest Mining rising 0.8%.
“Commodities are looking good again,” said Martin Angel, a dealer at Patersons Securities.
“A lot of people are suggesting (gold) is a hedge against inflation, so a lot of people are looking around for gold stocks.”
Oil steadied above $72 a barrel and was underpinned by data showing a much sharper-than-expected drop in US crude oil stockpiles last week.
Shares of Australian resources generally were boosted by optimism that global growth could be faster than forecast.
Top miners BHP Billiton and Rio Tinto jumped 1.5% and 2.2% respectively, while Australia’s biggest independent oil and gas group, Woodside Petroleum, advanced 1.5%.