By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Chinese and Hong Kong stocks rebounded after Beijing’s announced inflation-cooling measures proved less harsh than expected, while Japanese stocks ended at a four-month high as the yen’s decline against the euro spurred buying interest.
Tokyo’s Nikkei Stock Average (JP:NI225 10,014, +201.97, +2.06%) jumped 2.1% to 10,013.63 in Tokyo, notching its first finish above the 10,000-point level since June.
Also closing higher: the Shanghai Composite Index (CN:SHCOMP 2,865, +26.60, +0.94%) , up 0.9%, Hong Kong’s Hang Seng Index, (HK:HANGSENG 23,637, +422.93, +1.82%) up 1.8%, and Sydney’s S&P/ASX 200 (AU:XJO 4,640, +15.90, +0.34%) , up 0.3%. Thailand’s SET rose 0.8% in afternoon trade.
On mainland bourses as well as in Hong Kong, stocks recovered from a string of recent losses after the State Council Wednesday said it will initiate a series of measures to stabilize prices, mainly through administrative control, on commodities and energy prices.
Li Xin, analyst at China Development Bank Securities said: “Concerns over more stringent tightening policies (have) eased a bit, as the measures the State Council is planning to take will have limited material effect.”
Automobile and resource-linked stocks led the gains to recover some lost ground.
SAIC Motor Corp. (CN:600104 18.00, +0.84, +4.90%) rose 4.9% and Aluminum Corp. of China, or Chalco (ACH 22.72, +0.06, +0.26%) (CN:601600 10.70, +0.22, +2.10%) , rose 2.1% in Shanghai.
FAW Car Co. (CN:000800 18.33, +0.54, +3.04%) rose 3% and Yunnan Copper Co. (CN:000878 24.64, +0.62, +2.58%) gained 2.6% in Shenzhen.
In Hong Kong, shares of Jiangxi Copper (JIXAY 113.68, -7.81, -6.43%) (HK:358 23.05, +1.15, +5.25%) jumped 5.3% and Dongfeng Motor Group Co. (HK:489 16.42, +1.40, +9.32%) (DNFGF 1.95, -0.02, -1.02%) surged 9.3%.
“The correction since Nov. 8 has factored in more severe tightening measures, such as [an] interest-rate hike, price control and a lower loan- growth target. … Looking forward, we believe the market could still focus on the topic of inflation and controlling inflation could become a more difficult task for the government,” UBS Investment Research strategist John Tang wrote in a note to clients.
Dow Jones Industrial Average (DJIA 11,008, -15.62, -0.14%) futures jumped 77 points in screen trade, pointing to a higher opening on Wall Street.
The Tokyo market came to life in late morning trade, partly as the yen’s fall against the euro triggered futures buying. Traders also said a broader improvement in sentiment spurred sharp rises in banking shares.
“A huge amount of funds can move as foreign investors, who had been pessimistic on Japanese stocks, shift their stance from underweight to neutral,” said Tsuyoshi Segawa, equity strategist at Mizuho Securities.
Mitsubishi Electric Corp. (MIELY 19.00, -0.30, -1.55%) (JP:6503 798.00, -4.00, -0.50%) advanced 4% on a Nikkei report that the company aims to lift its consolidated sales to 4 trillion yen ($48 billion) by early fiscal 2013, representing a rise of more than 10% from its current fiscal-year forecast.
