Asia stocks climb on biggest US rally since 2009

Employees work at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc (JPX), in Tokyo. (Bloomberg pic)

TOKYO: Asian stocks climbed on Thursday after the biggest rally in US equities since 2009 offered relief from this month’s wrenching global market downturn.

Japanese benchmarks jumped well over 3% and Australian shares advanced more than 1% as trading resumed after holidays there.

However, Korean stocks were flat, Hong Kong saw more modest gains and US futures dipped, suggesting the follow-through from the blow-out session on Wall Street has limits.

US benchmarks soared 5% or more Wednesday on signs of robust consumer spending, easing concern about the tenure of the Federal Reserve chief and progress on US-China trade talks.

Elsewhere, crude oil prices gave up a slice of the gains of more than 8% overnight.

Ten-year Treasury yields are holding around 2.80%. The yen recouped some of yesterday’s losses against the dollar.

Just one of the S&P 500 members fell on Wednesday, when the Dow Jones Industrial Average jumped more than 1,050 points for its biggest-ever point gain.

Consumer shares paced the rally, with Amazon.com Inc jumping 9.5% on record holiday sales. Each member of the FAANG cohort rallied at least 6.4%. Nike and Apple rose more than 7%.

Yet it’s still a horrible month for US stocks, with the S&P 500 down almost 11%. Japan’s Topix is even worse, with a 14% slide.

Emerging markets have done better, thanks to expectations of less aggressive tightening by the Fed. The Shanghai Composite is off less than 4%, for example.

And China’s yuan, along with most major Asian currencies, is up against the dollar this month.

“We could still be choppy here and in a bit of a trading range” for stocks, Matt Miskin, a market strategist at John Hancock Financial Services, told Bloomberg Radio. “You’re getting whipsawed from all this different information hitting the markets,” he said. For the S&P 500, he said “we do not see a real sustainable breakout past the prior highs in the near term.”

A report that a US government delegation will travel to Beijing in two weeks to hold trade talks gave stocks a final push higher on Wall Street. Investors had earlier welcomed White House adviser Kevin Hassett’s assurance that Federal Reserve Chairman Jerome Powell’s job is “100%” safe.

Futures on European equity benchmarks were mixed in Asia. Trading in the UK and Europe will resume after a two-day holiday.