Asian markets surged yesterday, following another rally on Wall Street and ahead of a speech by Federal Reserve chief Ben Bernanke that many hope will outline plans to kickstart the ailing US economy.
The more positive mood – helped by a strong batch of US manufacturing data – saw safe haven assets fall, with gold tumbling further from its record high above US$1,900 and the yen weakening.
Regional firms with links to Apple slipped while its rivals rose after Steve Jobs announced his resignation of the US computer giant on Wednesday.
Traders took their cue from a third straight day of gains on Wall Street overnight where the Dow Jones Industrial Average rallied 1.29 percent, the S&P 500 rose 1.31 percent and the Nasdaq added 0.88 percent.
Tokyo stocks closed 1.54 percent higher after Wall Street rose overnight and on a weaker yen versus the dollar.
The benchmark Nikkei-225 index closed 132.75 points higher at 8,772.36. The Nikkei expanded its gains as investors welcomed the stability of the yen against major currencies.
In Shanghai, the composite index ended up 74.17 points, or 2.92 percent, at 2,615.26.
But analysts said the strong gains may not continue sessions as investors remained nervous about the possibility of further monetary tightening by the government.
In Sydney, Australian stocks gained 1.09 percent, buoyed by a rally on Wall Street, focused on corporate earnings results. At the close the benchmark S&P/ASX 200 was 45.2 points stronger at 4,212.8.
In Seoul, shares closed 0.56 percent higher boosted by major technology shares as investors bet Asian tech firms would gain by the departure of Apple chief executive Steve Jobs. The benchmark Kospi gained 9.80 points to 1,764.58 on heavy institutional buying.
HONG KONG: Stocks closed 1.47 percent higher yesterday, in line with a regional rally following another strong performance on Wall Street.
The benchmark Hang Seng Index rose 285.69 points to 19,752.48. The index was also boosted by a jump in China Unicom following a strong earnings report. The mobile operator surged 12.3 percent to HK$15.38.
SINGAPORE: Stocks in Singapore bucked the regional trend and rose 1.7 percent, with commercial developer CapitaMalls Asia the top gainer with an 8.5 percent rise. Commodities group Noble rose 4.8 percent.
The Straits Times Index closed 1.69 percent, or 45.84 points, higher at 2,765.74.
Regional markets got an initial lift as global equities rallied but the gains faded towards the close.
KUALA LUMPUR: Bursa Malaysia bucked the regional trend when it consolidated yesterday. Declining counters outpaced advancing counters by 429 to 240.
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) fell from its day high of 1,471.03 to its day low of 1,460.96 yesterday. It closed at 1,464.74 points, giving a day-on-day loss of 4.41 points, or 0.30 percent.
In other markets:
* Taipei fell 1.23 percent, or 92.06 points, to 7,410.87.
* Manila closed 0.54 percent, or 23.76 points, lower at 4,342.69.
* Jakarta closed flat, edging down 2.65 points to 3,844.37.
* Bangkok fell 2.05 percent or 21.43 points to 1,025.00.
* Mumbai 0.85 percent, or 138.65 points, to 16,146.33.
VIETNAM: The VN Index of Hochiminh Stock Exchange (STC) gained nearly five points or 1.25 percent to 401.65 points.The trading volume reached 30 million units worth 506 billion dong, marking the highest level in week.
The HNX Index also bounced nearly 1 percent to 69.75 points.
The trading value was equal to the figure in the previous trading session with nearly 445 billion dong for 40 million shares being changed hands.
EUROPE: European stocks were higher yesterday, ahead for a fourth day as investors looked for bargains among beaten-down banking and cyclical stocks, in thin markets ahead of the Jackson Hole central bank conference.
The FTSEurofirst 300 index of top European shares was up 0.4 percent at 940.56 points at 1130 GMT.
In midday trade, London’s FTSE 100 index added 0.11 percent to 5,211.49 points, Frankfurt’s DAX 30 index gained 0.80 percent to 5,726.65 points and in Paris the CAC 40 was up 0.87 percent to 3,166.99 points.
Investors remained cautious on the banking sector, and the European equity market in general, as a ban on short selling of shares of financial institutions and related derivatives in some markets was due to expire today.
AMERICA: A three-day stock rally ended much like it began, with a steep and sudden turn.
Stocks started higher early Thursday but turned lower within 20 minutes. Indexes in the U.S. and Europe sank after Germany’s main stock index, the DAX, suddenly dipped 4 percent. Traders struggled to explain the dive.
The Dow Jones industrial average fell 170.89 points, or 1.5 percent, to close at 11,149.82. It had been up 85 points shortly after the opening bell.
Bank of America Corp. jumped 9 percent on news that Warren Buffett will invest $5 billion in the troubled bank. BofA had lost half its value this year as investors grew worried about its need to raise capital and its growing liabilities related to subprime mortgages.
Other banks also rose after the billionaire investor gave his backing to Bank of America. Morgan Stanley gained 2.7 percent and Citigroup Inc. 4.8 percent. BofA and American Express Co. were the only companies in the Dow to rise.
This week’s trading has been marked by a series of sudden reversals. Robert Stein, a money manager responsible for $1.2 billion at Astor Asset Management, said questions about the economy have made investors uncertain and the stock market more volatile. Gains made one day can disappear the next, or even in the same day.
“We’re not seeing anything that’s convincingly bearish enough to call another recession, but nothing optimistic enough to suggest that a recovery is going to regenerate,” Stein said.
Earlier Thursday, the government reported an increase in the number of first-time claims for unemployment benefits last week. The Labor Department said applications for benefits rose to 417,000, the highest in five weeks. The figure was inflated by a strike at Verizon which ended earlier this week.
The S&P 500 index fell 18.33 points, or 1.6 percent, to 1,159.27. The Nasdaq fell 48.06 points, or 1.9 percent, to 2,419.63.
The S&P 500, the benchmark for most money managers, has gained 3 percent this week but is still down 10 percent for the month. Thursday’s drop broke a three-day rally in which the Dow gained 503 points.
Paul Zemsky, chief investment officer of ING Investment Management in New York, said this week’s gains were a result of investors bargain-hunting after stocks fell too far over the past month. He also said some of the gains were caused by technical trading as investors bought shares in order to exit short positions, or bets that the market would continue to fall.
Zemsky expects to see more big swings as long as the fear of recession hangs over the market. “People are trying to adjust their positions to news,” he said. “Once it’s clear where the economy is headed, I think things will calm down.”
There’s also plenty of speculation about whether Federal Reserve Chairman Ben Bernanke will offer some support for the economy when he speaks on Friday at a conference in Jackson Hole, Wyo. It was at that same symposium last year that Bernanke laid out an argument for the central bank’s $600 billion bond-buying program.
Zemsky thinks there’s little chance Bernanke will announce any new action Friday. “There’s nothing more than hope that Bernanke will drop a gift from the sky.”
More than three stocks fell for every one that rose on the New York Stock Exchange. Trading volume was above average at 5 billion shares.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD HKD 7.7957 11.2173 0.1007 12.6951 9.8203 7.8913 8.1706 - AUD 0.9541 1.3729 0.0123 1.5538 1.2019 0.9658 - 0.1224 CAD 0.9879 1.4215 0.0128 1.6087 1.2444 - 1.0354 0.1267 CHF 0.7938 1.1423 0.0103 1.2927 - 0.8036 0.8320 0.1018 GBP 0.6141 0.8836 0.0079 - 0.7735 0.6216 0.6436 0.0788 JPY 77.4422 111.431 - 126.112 97.5539 78.3915 81.1656 9.9339 EUR 0.6950 - 0.0090 1.1317 0.8755 0.7035 0.7284 0.0891 USD - 1.4389 0.0129 1.6285 1.2597 1.0123 1.0481 0.1283 Bloomberg