Asian markets mostly rallied yesterday after Federal Reserve chairman Ben Bernanke warned the US economy was still fragile and the bank would keep easy monetary policy in place.
While his comments played down recent strong jobs growth figures, traders on Wall Street jumped on them, and the prospect of more dollars floating around the market sent the greenback lower against the euro.
Tokyo surged 2.36 percent, or 236.91 points, to 10,255.15, its highest level since the quake-tsunami on March 11 last year.
Sydney rose 0.90 percent, or 38.5 points, to 4,301.3 and Seoul climbed 1.02 percent, or 20.57 points, to 2,039.76.
However, Shanghai closed 0.15 percent, or 3.42 points, lower at 2,347.18 due to ongoing concerns over China’s economy.
Bernanke said on Monday that the US central bank would likely keep stimulative policies in place despite improvements to the employment market.
“Basically Bernanke lit a flame under the market and we’ve seen risk on,” said Macquarie Equities Investment Advisor Brad Gordon in Auckland, according to Dow Jones Newswires.
HONG KONG: Shares closed higher yesterday after US Federal Reserve chief Ben Bernanke indicated the bank would continue its loose monetary policy.
The Hang Seng Index gained 1.83 percent, or 378.05 points, to 21,046.91.
Traders attributed some of the day’s gains to “window dressing”, where portfolio managers buy outperformers and sell laggards.
SINGAPORE: Most Southeast Asian stock markets gained yesterday after Federal Reserve chairman Ben Bernanke signalled ultra-loose monetary policy would continue.
In Singapore, the Straits Times Index closed up 1.49 percent, or 44.41 points, at 3,018.91.
Among the actives, palm oil producer Wilmar International gained 1.41 percent to S$5.02 while Singapore Airlines was up 0.09 percent at S$10.77.
KUALA LUMPUR: Share prices on Bursa Malaysia closed higher yesterday, buoyed by the rally in regional markets sparked by comments from US Federal Reserve chairman Ben Bernanke that easy monetary policy would stay to reduce unemployment, dealers said.
The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index
(FBM KLCI) gained 5.12 points to 1,588.10.
The Finance Index increased 54.06 points to 14,272.93, the Industrial Index rose 3.92 points to 2,868.67 and the Plantation Index surged 51.76 points to 8,714.63.
The FBM Emas Index rose 34.391 points to 10,910.66, the FBM70 Index was 40.24 points higher at 12,062.24 and the FBM ACE Index gained 13.12 points to 4,699.57.
In other markets:
* Taipei ended 0.78 percent, or 61.84 points, higher at 8,029.46.
* Manila closed 0.96 percent, or 48.47 points, higher at 5,078.10.
* Jakarta rose 1.18 percent, or 47.68 points, to 4,079.38.
* Bangkok added 1.60 percent, or 18.97 points, to 1,207.29.
* Mumbai rose 1.20 percent, or 204.58 points, to end at 17,257.36.
EUROPE: European stocks markets rose for a second day running yesterday as traders reacted to the prospect of further US stimulus set against the world’s weak economic recovery.
London’s benchmark FTSE 100 index rose 0.30 percent to 5,920.52 points approaching midday. Frankfurt’s DAX 30 climbed 0.68 percent to 7,126.43 points and in Paris the CAC 40 grew 0.56 percent to 3,520.94. Madrid advanced 0.75 percent to 8,286.6 points.
“Markets are in recovery mode following the falls of last week after … comments from (Federal Reserve chief) Ben Bernanke gave equities a boost,” said Simon Denham, head of Capital Spreads trading group.
AMERICA: Major stock indexes dipped Tuesday as weak readings on consumer confidence gave investors little reason to extend the recent rally.
The Dow Jones industrial average dropped 43.90 points to close at 13,197.73, a loss of 0.3 percent. Bank of America fell 3.3 percent, the biggest drop in the Dow, after an analyst downgraded the stock.
Major indexes opened higher, then pulled back after 10 a.m., when the Conference Board said its index of consumer confidence slipped in March. Higher gas prices offset the surging stock market. Around the same time, the Federal Reserve Bank of Richmond, Virginia reported that a measure of regional manufacturing plunged this month.
Other indexes edged lower. The Standard & Poor’s 500 index dropped 3.99 points to 1,412.52. The Nasdaq composite fell 2.22 points to 3,120.35.
More than four stocks fell for every three that rose on the New York Stock Exchange. Trading volume was well below average at 3.4 billion.
The S&P 500 index and the Nasdaq are up more than 1 percent for the week. The S&P 500 has already gained 12.3 percent to start the year. That three-month surge easily beats the 8 percent return most fund managers hope to make in a whole year. The Nasdaq is up even more for the year, 19.8 percent.
Brian Gendreau, market strategist at Cetera Financial, said the stock market still has room to go higher even after such a strong start. Companies in the S&P 500 index are trading for around 13 times their expected earnings over the next year, below the average of 14.6 times over the past decade. And there’s plenty of cash still tucked away in the Treasury market.
“Compared to bonds, stocks remain very attractive,” Gendreau said. “That doesn’t tell you if we’ll get a move in a week or a month from now, but it does tell you that there’s a lot of pent-up demand.”
Earnings from Lennar Corp. pulled housing stocks up. The country’s third-largest builder reported quarterly profits that beat analysts’ estimates by delivering more houses and pulling in more orders. Lennar rose 4.7 percent, the best gain in the S&P 500 index. PulteGroup rose 3.6 percent, D.R. Horton 2.8 percent.
The economic reports on consumer confidence and regional manufacturing helped push up prices in the U.S. government debt market, where traders park funds when the economy looks sluggish. The 10-year Treasury note rose 53 cents for every $100 invested. The yield fell to 2.18 percent from 2.26 percent late Monday.
Demand for Treasurys has pulled yields down from highs reached last week. The yield on the 10-year note touched 2.4 percent last Tuesday, the highest yield since October.
Natural gas prices fell again Tuesday on rising supplies and warmer winter weather. Natural gas futures fell 1.8 cents to $2.21 per 1,000 cubic feet. That’s near a 10-year low and half of what natural gas fetched back in July.
Any money that consumers are saving on natural gas could wind up in the gasoline tank. The national average for regular gasoline in the U.S. is $3.90 per gallon. It’s risen 62 cents since Jan 1.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD USD – 1.3329 0.0120 1.5955 1.1057 1.0045 1.0438 0.1288 EUR 0.7502 – 0.0090 1.1970 0.8294 0.7535 0.7830 0.0966 JPY 83.120 110.790 – 132.620 91.8800 83.4830 86.7490 10.7040 GBP 0.6267 0.8354 0.0075 – 0.6930 0.6295 0.6542 0.0807 CHF 0.9044 1.2057 0.0109 1.4432 – 0.9085 0.9440 0.1165 CAD 0.9956 1.3271 0.0120 1.5885 1.1006 – 1.0391 0.1282 AUD 0.9580 1.2771 0.0115 1.5287 1.0592 0.9624 – 0.1234 HKD 7.7646 10.351 0.0934 12.3888 8.5845 7.7994 8.1038 – Bloomberg