HONG KONG (MarketWatch) -- Asian stocks closed mostly higher Wednesday, with the financial sector advancing after losses in the previous two sessions, as investors cheered the latest round of interest rate cuts by central banks.
Thailand's central bank became the latest to join the global easing effort Wednesday, slashing its benchmark interest rate by 1% to 2.75%, its largest-ever cut since adopting inflation targets in 2000.
"The interest rate downtrend will continue for a while," said Andrew To, head of research at Tai Fook Securities in Hong Kong, referring to the coordinated response by central banks.
He added additional measures were likely to be unveiled in China as the central government seeks to combat the domestic slowdown by boosting internal consumption.
Australian stocks shook off earlier jitters to advance after data released Wednesday showed the economy grew at its slowest pace in eight years during the third quarter. The Reserve Bank of Australia slashed it main lending rate to 4.25% from 5.25% Tuesday, its lowest level since mid-2002.
Shares of BHP Billiton advanced in Sydney, in an otherwise-mixed session for the commodity sector.
Among financials, Hong Kong-listed shares of HSBC Holdings (HK:5: news, chart, profile) (HBC:
51.42, +1.19, +2.4%) rose 1.7%, recouping some of their more than 6% loss Tuesday.
Thai shares rallied as antigovernment protesters decamped after a week-long siege of the nation's main international airport following Tuesday's court ruling that disbanded the ruling government for electoral fraud. Bangkok's SET climbed 2.5% to 396.94.
Stocks across the region were higher, apart from Taiwan and India, which fell. South Korean shares ended little changed.
Hyundai Motor Co. shares fell, along with other Asian auto makers, after the company reported a 41% decline in U.S. vehicle sales in November. Hyundai's Seoul-listed shares ended 3% lower.
Brokers were expecting quieter trading throughout the remainder of December as hedge funds and other institutional investors move to the sidelines, closing out positions ahead of the calendar year-end.
"The risk for them is that if they are on par with their competitors and put on a trade now that goes wrong, then their performance for the year is going to look despicable," said Andrew Sullivan, a sales trader with MainFirst Securities in Hong Kong. "One of my funds told me this morning they've effectively closed their book for the year."
The U.S. dollar fell against the Japanese yen, reversing a modest advance in New York Tuesday. The greenback was quoted at 92.83 in late Tokyo, down from its level of 93.14 in New York, and down from 93.05 there late Monday.
Qantas Airways (AU:QAN: news, chart, profile) shares climbed 4.4% after the Australian carrier confirmed it was in merger talks with British Airways (BAIRY:
24.49, +3.23, +15.2%) .
BHP Billiton (BHP:
36.44, +0.67, +1.9%) (AU:BHP: news, chart, profile) ended 2.9% higher after news the miner will commit $245 million to the redevelopment of the Cossack oil project headed by Woodside Petroleum (AU:WPL: news, chart, profile) in northwest Australia.
Honda Motor Co.'s (JP:7267: news, chart, profile) (HMC:
20.59, +0.65, +3.3%) shares were down sharply after the Nikkei newspaper reported Wednesday the auto maker plans to scale back its overseas expansion plans, including freezing a capacity-expansion project in Turkey and delaying the start up of its second factory in India by one year or longer. Shares of Honda fell 4.7%.
Regional investors were somewhat heartened by a stronger session for U.S. stocks Tuesday, where the Dow Jones Industrial Average ($INDU:
8,419.09, +270.00, +3.3%) gained 270 points, or 3.3%, to end at 8,419. Gains were driven in part by a rally in General Motors (GM:
4.85, +0.26, +5.7%) shares after the auto maker, along with its two smaller rivals, detailed their restructuring plans in hopes of gaining access to at least $25 billion in loans.
Among regional indexes, Japan's Nikkei 225 Index (JP:1804610: news, chart, profile) ended 1.8% higher at 8,004.10 and China's Shanghai Composite was 4% up at 1,965.41.
Hong Kong's Hang Seng Index ended up 1.4% at 13,588.66. The city's China Enterprises Index, a benchmark of Hong Kong-listed mainland shares, was up 3.3% at 7,232.54.
Sinopec (HK:386: news, chart, profile) (SNP:
63.47, +3.99, +6.7%) , China's largest refiner, saw its shares up 1.9%, after crude-oil prices fell overnight. The refiner, subject to state-regulations on what it can charge at the pump, enjoys higher margins when crude prices decline.
