Hong Kong: Asian shares climbed to a six-month high on Monday, as hopes that the global economic downturn is nearing its bottom spur demand for riskier assets while hitting the yen and safe-haven government bonds.
European shares also traded higher, with the pan-European FTSEurofirst 300 Index of top shares gaining more than 1% in early trade.
Economic recovery hopes lifted oil prices by almost $1 (Rs50) per barrel, while Japanese bonds fell, sending the benchmark 10-year yields to a four-month high and the yen slid to its lowest since mid-October against the dollar and the euro.
Riskier and higher yielding currencies such as the Australian and New Zealand dollars rose, reflecting improved risk appetite.
North Korea’s launch of a rocket on Sunday had little market impact, given that the action had been expected and is seen having limited economic implications.
Instead, investors saw a silver lining in recent bleak data, and expectations that the global economy may not get any worse are spurring some analysts to call for sustained gains in equity markets over the near term.
A key US jobs report on Friday showed unemployment soared to 8.5% last month, or a 25-year high, but markets found comfort in the fact that the numbers came in just as expected.
In Europe, the euro zone’s dominant service sector contracted sharply again in March, but not as rapidly as in February, a private survey showed on Friday.
“The global market sentiment has changed quite dramatically in the past few days after the US data and the Group of Twenty (G-20) summit,” said Alex Tang, head of research with Core Pacific-Yamaichi International in Hong Kong. “Also data from China still suggests a solid recovery in the economy,” he said, adding he expected more gains in the Hong Kong index.
The MSCI Index of Asia-Pacific stocks outside Japan rose about 2%, after touching its highest since 16 October. That marked a fifth consecutive session of gains and a rise of more than 30% since the gauge hit their 2009 low on 4 March.
Japan’s Nikkei average gained 1.2% to a three-month closing?high.?Hong?Kong shares rose 3.1% to a three-month high with HSBC Holdings Plc. outperforming following the strong response to the bank’s rights issue, while property stocks rose on signs of a recovery in the recession-hit sector.
Other Asian indexes also rose to multi-month highs, although stronger gains in early trade were pared later.
India and Singapore saw gains of under 2%.
South Korea’s main index rose 1.1% after earlier touching its highest since mid-October.
Global stock markets have rallied last month on expectations that a worldwide combination of steep interest rate cuts, stimulus measures, and outright bailouts of some industries will eventually pull the global economy out of its worst slump since the 1930s.
G-20 world leaders last week met in London and set out a $1.1 trillion package to help revive the global economy, further giving confidence to investors that policymakers will continue to aggressively tackle the world recession.
US Federal Reserve chairman Ben Bernanke on Friday said the US central bank will continue to use the unorthodox methods it has resorted to during the financial crisis to settle markets and set the stage for a resumption of growth.
Parvathy Ullatil in Hong Kong and Jungyoun Park in Seoul contributed to this story.