By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Major Asian markets jumped Thursday as investors welcomed the U.S. Federal Reserve’s quantitative-easing plan, 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, dubbed QE2, to inject life into an anemic U.S. economy. Read more about the Fed’s plan.
“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%, while 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%.
Futures on the Dow Jones Industrial Average advanced 4 points in screen trade, after the benchmark average rebounded from sharp intraday losses in its regular session to end higher.
“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 Shannon Briggs, adviser at Macquarie Private Wealth.
Shares in Tokyo got a boost from strong earnings and relief that the Fed didn’t pursue a more aggressive asset-buying plan, which could have driven an already-strong yen up further 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.
Shares of Fast Retailing (JP:9983 10,820, +290.00, +2.75%) (FRCOY 13.69, +0.03, +0.22%) rose 8.1% after the firm 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 — as sales of winter clothing picked up.
Hong Kong’s property stocks rallied on hopes the Fed’s asset-purchase program would help increase liquidity in the region and support the city’s property market.
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, Norman Chan, Hong Kong Monetary Authority chief, 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. “That will benefit China’s stock market. But investors are concerned now what steps China’s central bank will roll out to curb capital inflows and rein in rising asset prices. So they may not be willing to chase the market rally aggressively in the near term.”
