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Asian shares in broad-based rise

July 17, 2012

HONG KONG: Asian shares were widely up today, led by a sharp rise in Hong Kong, amid hopes of Chinese and US stimulus measures ahead of Federal Reserve Chairman Ben Bernanke appearing before Congress.

Hong Kong’s benchmark Hang Seng Index closed up 1.75%, or 333.99 points, at 19,455.33, while the Shanghai Composite Index rose 0.62%, or 13.23 points, to 2,155.20 on bargain-hunting after hitting a three-year low yesterday.

In Tokyo the Nikkei climbed 0.35%, or 30.88 points, to 8755.00, while Sydney’s ASX 200 rose 0.87%, or 35.7 points, to 4,140.8, and the Kospi in Seoul was up 0.23%, or 4.17 points, at 1,821.96.

There were several factors behind Hong Kong’s surprise rise, said Jackson Wong, an investment manager at Tanrich Securities, including short-covering and hopes of stimulus measures in China and quantitative easing in the US.

In Australia, IG Markets analyst Cameron Peacock said: “Perhaps today’s price action is just a function of the market being sick and tired of all the doom and gloom.

“Perhaps the worst-case scenarios for Europe, China, and the US are already priced into the market.”

China said last Friday economic growth slowed to 7.6% year-on-year in the second quarter, its lowest level in more than three years.

The figures have led to hopes Beijing will take steps to boost the world’s second-largest economy, but new statistics today showed foreign direct investment in the country fell by 3% in the first six months.

Investors were also looking to two days of Congress testimony by Bernanke, scheduled to start later today, for hints of new steps by the Federal Reserve.

In Tokyo, Barclays Bank chief currency strategist Masafumi Yamamoto told Dow Jones Newswires: “If there is no indication (for more easing) from him, stocks and long-term US Treasury yields will fall on disappointment.”

European stock markets also advanced in opening trade, with London’s FTSE 100 up 0.22% to 5,674.85 points, Frankfurt’s DAX 30 adding 0.27% to 6,583.77 points, and the CAC 40 in Paris rising 0.28% to 3,188.71.

The euro gained against major currencies in Asian trade after the IMF said it was releasing 1.48 billion euros (US$1.82 billion) in new funds to troubled Portugal.

The single currency fetched US$1.2294 compared to US$1.2271 in New York late yesterday, and also rose against the yen, buying 97.13 yen from 96.40 yen.

The International Monetary Fund said Lisbon was on track to narrow its fiscal deficit under tough austerity measures required under the 78-billion-euro joint IMF-European Union rescue programme launched in May 2011.

The greenback traded at 78.99 yen from 78.83 yen yesterday.

Oil was steady with New York’s main contract, light sweet crude for delivery in August, up just five US cents at US$88.55 and Brent North Sea crude for September delivery up seven US cents at US$103.44.

Gold was at $1,594.00 an ounce at 0830 GMT, from $1,585.35 yesterday.

In other markets:

  • Taipei rose 0.52%, or 36.96 points, to 7,127.00. Leading smartphone maker HTC gained 3.83% to Tw$298.0 while Taiwan Semiconductor Manufacturing Co was 0.93% lower at Tw$74.8.
  • Manila fell 0.24%, or 12.87 points, to 5,285.12. Top-traded Ayala Corp fell 1.16% to 458 pesos while Philippine Long Distance Telephone Co dropped 1.56% to 2,734 pesos.
  • Wellington edged up 0.04%, or 1.53 points, to 3,468.86. Market heavyweight Fletcher Building rose 0.2% to NZ$5.89 and Telecom Corp dropped 0.2% to NZ$2.465.



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