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Asian markets rise, dealers digest stimulus plans

September 21, 2012

HONG KONG: Asian markets rose today, rebounding from the previous day’s losses, as stimulus moves by the central banks of the United States, Europe and Japan outweighed another round of weak economic data.

Shares looked set to see a positive end to a week that saw the Bank of Japan follow the Federal Reserve and European Central Bank (ECB) in unveiling plans to boost growth, but also showed manufacturing in China continues to shrink.

Tokyo rose 0.61% by the break, Hong Kong climbed 0.93%, Sydney added 0.46%, Shanghai was 0.60% higher and Seoul advanced 0.57%.

Buying sentiment has been lifted since the ECB said it would buy unlimited amounts of debt from under-pressure eurozone nations to keep their borrowing costs down, followed a week later by the Fed move to buy huge amounts of US bonds.

The Bank of Japan (BoJ) said Wednesday it would extend its own asset-purchasing scheme.

“We are in the aftermath of some pretty big announcements, with moves by the European Central Bank and the (Fed), and investors are still digesting that, while economic data is still on the soft side,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney.

While the banks’ moves provided hope to the markets, reality hit home with a string of weak data, including an HSBC survey that found China’s manufacturing activity contracted for an 11th straight month in September.

Wall Street provided an anaemic lead following a batch of numbers including disappointing jobless claims figures.

The Dow rose 0.14%, the S&P 500 was flat and the tech-heavy Nasdaq dropped 0.21%.

On currency markets the euro picked up slightly after retreating from multi-month highs fuelled by the BoJ announcement.

The single currency bought US$1.2980 and 101.55 yen in early Asian trade, compared with US$1.2972 and 101.46 yen in New York late yesterday.

It had surged to as high as US$1.3170 at the start of the week after the Fed easing plan and 103.50 yen on Wednesday.

The dollar was at 78.23 yen against 78.24 yen.

Oil prices rose, with New York’s main contract, light sweet crude for delivery in November, gaining 61 US cents to US$93.03 and Brent North Sea crude for November delivery adding 38 US cents to US$110.41.

Gold was at US$1,771.28 at 0310 GMT compared with US$1,759.60 yesterday.



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