MW: Nikkei spikes to lead Asia up after Fed easing
By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Major Asian markets jumped on Thursday as investors welcomed the U.S. Federal Reserve’s monetary stimulus package, with Japanese stocks also lifted by upbeat earnings and Fast Retailing’s October sales report.
Stocks, commodity prices and several regional currencies responded positively to the Fed’s announcement of a $600 billion asset-buying plan -- called quantitative easing, or QE2 -- to inject life into an anemic U.S. economy.
“There is a sense of relief that the U.S. Fed’s decision did not diverge too sharply from market expectations,” said Yoshinori Nagano, senior strategist at Daiwa Asset Management.
Japan’s Nikkei Stock Average (JP:NI225 9,359, +198.80, +2.17%) was the region’s best performer, surging 2.2%.
China’s Shanghai Composite Index (CN:SHCOMP 3,087, +55.95, +1.85%) advanced 1.9%, Hong Kong’s Hang Seng Index (HK:HANGSENG 24,536, +390.96, +1.62%) rose 1.6%, Australia’s S&P/ASX 200 (AU:XJO 4,745, +22.73, +0.48%) gained 0.5% and India’s Sensex (XX:SENSEX 20,894, +120.05, +0.59%) climbed 1.8% in afternoon trading.
South Korea’s Kospi added 0.3% and Taiwan’s Taiex advanced 0.8%.
Dow Jones Industrial Average (DJIA 11,215, +26.41, +0.24%) futures advanced 4 points in screen trade, after the benchmark average rebounded from sharp intraday losses to end higher in a regular session overnight.
“It was a wild night …but with QE2 in the bag, the market might start to view positive U.S. economic data in a more bullish light,” said Macquarie Private Wealth adviser Shannon Briggs.
Shares in Tokyo were bolstered by strong earnings and relief that the Fed didn’t pursue a more aggressive asset-buying plan, which could have driven an already-strong yen further up against the U.S. dollar.
Suzuki Motor (JP:7269 1,971, +22.00, +1.13%) (SZKMY 100.00, 0.00, 0.00%) jumped 3.7%, Tokyo Electron (JP:8035 4,530, -15.00, -0.33%) (TOELY 114.05, +0.05, +0.04%) advanced 3.1% and Hitachi (HIT 45.48, +0.19, +0.42%) (JP:6501 364.00, 0.00, 0.00%) tacked on 2.5% in the wake of strong earnings reports.
Fast Retailing (JP:9983 10,820, +290.00, +2.75%) (FRCOY 13.69, +0.03, +0.22%) rose 8.1% after the firm on Tuesday said its domestic same-store sales at the Uniqlo casual-clothing chain fell 1.1% in October from a year earlier -- an improvement from September’s 24% drop versus the year ago -- as sales of winter clothing picked up.
Hong Kong property stocks rallied on hopes the Fed’s asset-purchase program would help further increase liquidity in the region and keep the city’s property market supported.
Sino Land (SNLAY 10.87, +0.85, +8.52%) (HK:83 18.10, +1.04, +6.10%) surged 6.1%, Cheung Kong Holdings (HK:1 129.90, +3.80, +3.01%) (CHEUY 16.16, +0.27, +1.70%) gained 3% and Henderson Land Development (HK:12 58.80, +1.25, +2.17%) (HLDCY 7.35, +0.13, +1.80%) rose 2.2%.
Earlier in the day, Hong Kong Monetary Authority chief Norman Chan said the Fed’s quantitative easing will add to inflationary pressures in Asia and compound difficulties in heading off price bubbles in the city’s real-estate market. Read full story on Chan’s comments.
Chinese shares advanced as metals shares rebounded strongly after succumbing to profit-taking pressures and concerns about further tightening measures from Beijing over the past two sessions.
“The U.S. quantitative-easing measures and potentially similar measures by the European Union and Japan will move excess liquidity to emerging markets,” said Guosen Securities analyst Wang Junqing.
