Asian markets follow Wall St to extend rally

Asian stock markets have rallied for a second straight session, tracking gains in New York where traders cheered surprisingly upbeat earnings from Wall Street titan JPMorgan Chase
AFP

Hong Kong (AFP) – Asian stock markets rallied for a second straight session Thursday, tracking gains in New York where traders cheered surprisingly upbeat earnings from Wall Street titan JPMorgan Chase.

The renewed confidence saw investors shift out of the safe investment yen, which in turn helped Japan’s Nikkei chalk up another strong performance.

Analysts said a shock decision by Singapore to loosen monetary policy had also provided a lift to sentiment and sent the island state’s currency tumbling.

After Wednesday’s rally fuelled by rising oil prices and strong Chinese trade data, regional investors returned to trading floors to news that JP Morgan had posted forecast-beating first-quarter earnings.

The banking giant also said the US economy, the world’s biggest, was on a solid footing and dismissed the prospects it would go into recession this year. The news provided strong support for the financial sector, with all three main New York indexes ending more than one percent higher.

“The fact that investor appetite for the heavily weighted banking sector looks to be returning could help see an even stronger day,” Angus Nicholson, a markets analyst in Melbourne at IG Ltd., told clients.

In early trade Hong Kong was up 0.8 percent, Shanghai added 0.4 percent, Sydney climbed 0.7 percent and Seoul shot up more than 1.1 percent.

But Tokyo led the gains, with the Nikkei up 2.5 percent by the break. Japanese exporters were the big beneficiaries of another drop in the yen against the dollar. 

The greenback bought 109.44 yen, against 109.33 yen in New York. The US unit is also well up from the levels below 108 yen seen earlier in the week when worries about the state of the global economy sent investors racing to safety.

Singapore’s dollar sank 0.8 percent — the most in five months — after the Monetary Authority of Singapore eased monetary policy as it looks to shore up the economy. 

Nader Naeimi, head of dynamic markets at AMP Capital Investors said the move has given traders some hope that central banks will continue to unveil measures to kickstart growth.

“Central banks will continue to ease policy,” he told Bloomberg News. “The weakness that we’ve seen in the US dollar and the fact that the Fed is going slowly now is allowing other countries to come out and ease. That is what we need.”

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 2.5 percent at 16,782.02 (break)

Shanghai – Composite: UP 0.4 percent at 3,077.22

Hong Kong – Hang Seng: UP 0.8 percent at 21,326.88

Euro/dollar: DOWN at $1.1261 from $1.1276 on Wednesday 

Dollar/yen: UP at 109.44 yen from 109.33 yen

New York – Dow: UP 1.1 percent at 17,908.28 (close)

London – FTSE 100: UP 1.9 percent at 6,362.89 (close)

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