Singapore: Asian shares rose on Wednesday, led by electronics makers and resource stocks, after successful European debt auctions boosted hopes for global growth and lifted commodity prices.
The euro steadied near its highest in two weeks, and easing fears about Europe’s debt crisis also fuelled gains for higher-yielding currencies such as the Australian dollar.
Industrial raw materials also gained, with copper up for a seventh day running, while crude oil extended its rally into a third day.
Tokyo’s Nikkei rose 1.6% to top 10,000 points for the first time in a month, picking up steam after closing above its 25-day moving average on Tuesday.
“The speculative sell-off in response to negative news, which we had seen up until now, might have come to a halt, and short-covering is now picking up momentum,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management.
Electronics makers were the biggest contributors, with Canon up 3.2% and Kyocera up 2.2%. The Philadelphia semiconductor index had jumped 5.5% on Tuesday after Taiwan’s big contract chip makers forecast growing demand.
US stocks gained more than 2% on Tuesday, with the S&P 500 rising above its 200-day moving average for the first time in a month, as investors took heart from successful debt auctions in some of the euro zone’s weaker members.
“From a technical perspective, the US market retested its 200-day moving average and managed to go through it, so the next few days will be very interesting,” said Matt Riordan, portfolio manager at Paradice Investment Management in Sydney.
“I think it will remain volatile.”
The euro was up at $1.2315 having risen to as high as $1.2349, the strongest level since 1 June, in the previous session after debt auctions in Spain, Ireland and Belgium drew solid demand.
The single currency has been battered for months as investors took fright at high euro zone sovereign debt levels and low growth prospects in several countries in the bloc.
The bond auctions also helped the Australian and New Zealand dollars, higher-yielding currencies that tend to gain on heightened risk appetite.
Some traders said a short squeeze on the euro -- with investors who had been betting on falls scrambling to cover their positions -- could push the currency higher.
“The price action suggests that both the euro and the Aussie’s rally in the past few sessions have a bit to run,” said John Horner, currency analyst at Deutsche Bank in Australia.
Japanese government bonds dipped, following a fall in US Treasuries as stock market gains dampened demand for safe-haven government debt, but losses were limited as traders cautioned the European crisis still had some months to run.
“The significant rise in stock prices has been taken in stride as it is difficult for investors to become optimistic while worries over the euro zone’s debt situation continue to simmer,” said Makoto Noji, a senior market analyst at Mizuho Securities.
September 10-year JGB futures fell 0.13 point to 140.29, pulling back from a two-year high above 141.00 struck the previous week.
US crude futures edged up to near $77 a barrel, a day after spiking more than 2% on growing investor confidence in a global economic recovery.
Hopes of improving demand for resources also boosted copper for a seventh straight day
That, in turn, lifted shares in the resources sector, while Australian mining heavyweights Rio Tinto and BHP Billiton, both of which rose nearly 2%, were also helped by signs the Canberra government was planning revisions to its proposed mining tax.