Asia rises on news of Europe stimulus
ASIAN markets mostly pushed higher yesterday, taking a lead from fresh gains in New York and Europe in response to reports that the European Central Bank (ECB) would widen its stimulus programme.
Speculation about further monetary easing in the euro zone pushed the euro lower, while the dollar gave up some of its United States gains in early Japanese trade.
Tokyo - which surged almost 4 per cent on Monday before losing 2 per cent on Tuesday - jumped 2.64 per cent, or 391.49 points, to finish at 15,195.77.
Sydney added 1.14 per cent, or 60.9 points, to end at 5,385.9 and Seoul closed 1.13 per cent higher, gaining 21.69 points to 1,936.97. Hong Kong tacked on 1.37 per cent, or 315.39 points, to end at 23,403.97.
Mumbai gained 0.8 per cent, or 211.58 points, to 26,787.23, and Jakarta ended up 0.89 per cent, or 44.98 points, at 5,074.32.
But Shanghai fell 0.56 per cent, or 13.10 points, to 2,326.55.
Singapore and Kuala Lumpur were closed for public holidays.
European markets on Tuesday were broadly higher after Chinese data showed the economy growing quicker than expected, even though it was at its slowest pace since the start of 2009.
They moved higher in Europe and on Wall Street later in the day after a report that the ECB could expand its bond-buying scheme to include corporate notes.
The ECB's present quantitative easing programme is limited to covered bonds and asset-backed securities, but the corporate paper market is much larger and better established.
If followed through early next year, as some reports suggest, the move could further push down long-term interest rates in the euro area and better encourage bank lending.
On Wall Street, the three main indexes posted a third straight day of hefty gains on Tuesday. The Dow rose 1.31 per cent and the S&P 500 jumped 1.96 per cent.
The Nasdaq rallied 2.4 per cent, helped by a strong Apple earnings report. Apple, the biggest US company by market capitalisation, rose 2.7 per cent as fourth-quarter profits jumped 13 per cent to US$8.5 billion (S$10.8 billion) on strong iPhone sales.
European stocks also rallied, with London's FTSE 100 up 1.68 per cent, the Paris CAC 40 2.25 per cent higher and the DAX 30 in Frankfurt surging 1.94 per cent.
This week's gains have calmed nerves after last week's volatility, which was fuelled by worries over the global economy, although analysts say there is ongoing anxiety as the euro zone, China and Japan continue to struggle.
Expectations of further easing weighed on the euro, which dipped to US$1.2714 in New York on Tuesday from 1.2819 earlier in the day in Asia. In Tokyo exchanges yesterday afternoon, the single currency bought US$1.2725.
The euro was trading at 135.91 yen (S$1.62) against 136.04 yen in the US, well down from 136.70 yen earlier on Tuesday.
"The slippage in the euro-dollar rate was exacerbated by comments from German Finance Minister Wolfgang Schaeuble that a lower euro exchange rate helps the (German) economy," National Australia Bank said in a note.
The dollar also struggled to hold on to its US gains, dipping to 106.90 yen from 106.99 yen. However, the greenback was still up from the 106.56 yen in Asia on Tuesday.