BEIJING – Asian stocks rose Thursday after Wall Street soared overnight, breaking a six-day string of losses. The recovery brought a measure of relief to many investors, although experts warned that more volatility could be ahead.
The Shanghai Composite Index, whose sharp drop Monday triggered a global sell-off, rose 2.2 per cent to 2,992.99 points, rebounding from several days’ declines. Tokyo’s Nikkei 225 was up 2 per cent at 18,753 and Seoul’s Kospi gained 1.1 per cent to 1,915.70.
The gains came after Wall Street rocketed up overnight. The Dow Jones industrial average soaring more than 600 points, or 4 per cent. That was its third-biggest point gain of all time and its largest since Oct. 28, 2008.
Hong Kong’s Hang Seng advanced 2.3 per cent to 21,573.56 and Sydney’s S&P ASX 200 gained 1.6 per cent to 5,254.00. Benchmarks in Taiwan, Singapore, Bangkok and Jakarta also rose.
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Traders were encouraged by comments from William Dudley, president of the New York Federal Reserve Bank, that the case for a U.S. interest rate hike in September is “less compelling to me than it was a few weeks ago,” given China’s troubles, falling oil prices and weakness in emerging markets.
“Traders took the cue to buy,” said Nicholas Teo of CMC Markets in a report.
Following a six-year run-up in U.S. stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon.
Panicked selling over the past week was triggered by declines in China, but analysts said it had no basis in economic developments. The Shanghai index has lost more than 40 per cent of its value since soaring to a peak June 12 and then plunged despite a multibillion-dollar government intervention.
Analysts said there are probably more roller-coaster days ahead because of worries about China and a possible Fed rate increase.
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The slide in the Dow over the past week wiped out some $2 trillion in stock value in the U.S.
The broader Standard & Poor’s 500 index jumped 72.90 points, or 3.9 per cent, to 1,940.51. It was the S&P’s best day in percentage terms in nearly four years. The Nasdaq composite rose 191.05 points, or 4.2 per cent, to 4,697.54.
In currency markets, the dollar rose to 120.2220 yen from Wednesday’s 120.1440 yen. The euro edged down to $1.1327 from the previous session’s $1.1337.
Benchmark U.S. crude gained 92 cents to $39.53 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 71 cents on Wednesday to close at $38.60. Brent crude, used to price international oils, rose $1 to $44.14 in London after losing 7 cents the previous day to close at $44.14.
