Active Stocks
Tue Mar 19 2024 10:31:03
  1. Tata Consultancy Services share price
  2. 4,019.95 -3.01%
  1. Tata Steel share price
  2. 148.80 -0.53%
  1. NTPC share price
  2. 311.90 -1.66%
  1. HDFC Bank share price
  2. 1,441.50 -0.32%
  1. ITC share price
  2. 414.25 -0.75%
Business News/ Opinion / Online-views/  Asian shares firm on hopes for global economy
BackBack

Asian shares firm on hopes for global economy

Asian shares firm on hopes for global economy

Premium

Hong Kong: Asian shares rose for a second consecutive session on Wednesday on tentative signs of an improving outlook for the battered global economy, while oil gained ground in anticipation of more production cuts.

Regional government bonds, including Japanese debt, retreated amid the revival in risk-taking, while major currencies remained in tight ranges.

The mood was spurred by data showing activity in China’s manufacturing sector may be bottoming out and a surprise rise in US pending home sales, providing hope for two economies critical to a recovery in Asia’s exports.

Investors also welcomed the US Federal Reserve’s extension of its programme to extend dollars to markets worldwide, and signs the US Senate is moving forward on a package intended to revive growth in the world’s largest economy.

“There’s some hopes that the United States will reach agreement on a package, but the benefits of this are limited right now since a lot remains unclear," said Noritsugu Hirakawa, a strategist at Okasan Securities.

The MSCI index of Asia-Pacific stocks outside Japan advanced 1.3% as of 8:45am, led higher for a second day in a row by technology shares such as South Korea’s Samsung Electronics and Japan’s TDK Corp.

Asian shares are still down nearly 8% for the year after a tough January, though the MSCI index remains about 18% above five-year lows hit in November.

Investors got a much needed boost from data on Wednesday showing China’s official purchasing managers’ index rose, even though it remained below a reading of 50 that divides expansion from contraction.

Optimism in the US housing market - at the centre of the worst financial crisis since the Great Depression - may be close to reaching a bottom also helped after data showed a surge in pending sales of previously owned US homes in December.

Data in Australia meanwhile showed retail sales surged in December as government hand-outs, lower borrowing costs and falling petrol prices boosted consumer spending.

Japan’s Nikkei average rose 2.2%, while markets in South Korea, Hong Kong and Shanghai advanced 1-2% each.

Indexes in Taiwan and Singapore posted more modest gains, while Australian shares were dragged down 1 percent by a slump in shopping mall owner Westfield Group, which is in the midst of raising capital.

Fed provides dollars

Policy makers worldwide are reaching for measures to revive their economies, including slashing interest rates, boosting spending and cutting taxes.

Among the most closely watched is the passage of a US stimulus and tax cut package. US Senate Republicans on Tuesday offered their own, cheaper version than the one for more than $800 billion sought by US Democrats.

News that the US Federal Reserve will extend currency swap lines with 13 central banks worldwide by six months also lifted sentiment in Asian markets.

The US dollar edged up against a basket of currencies, recovered some losses made the previous session when the pending homes sales figures and stimulus plans eased risk aversion.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 04 Feb 2009, 09:39 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App