Asia Rallies for 5th Day After China Rate Cut
Asian market rose for a fifth day Thursday, helped by hopes that policymakers' efforts will ultimately prevail after a surprise and aggressive rate cut from China, though U.S. data ominously reflected a deep recession.
Investor sentiment also improved after U.S. stocks chalked up a four-day winning streak, their longest run since May, as shares in General Motors and Ford Motor surgedon expectations that Washington will bail out the car industry.
While investors cheered China's policy moves, views on India, emerging Asia's other titan, darkened after militants killed over 100 people in the financial capital Mumbai. India's stock markets were shut for the day following the attacks.
The last few days have seen a buildup in political risks in Asia, especially after the attacks in India and anti-government protestors in Thailand blockaded an airport in Bangkok. Thai stocks were down 1.6 percent as protests in Bangkok threatened to escalate into widespread civil unrest after the country's prime minister refused to step down.
The cost of protection against sovereign debt default in Thailand and indications of heightened aversion to risk rose in India, adding to uncertainty when investors crave for stability with focus still on the economic impact of the financial crisis.
Oil prices shrugged off the rise in Asian equities and fell more than $1 near $53 a barrel as investors shifted their focus back to distressed demand, after U.S. government data showed a sharp buildup in crude stocks.
Japan's Nikkei 225 Average climbed almost 2 percent to its highest close in over a week as hopes a Chinese rate cut will help China's economy bolstered shippers,
steelmakers and construction machinery firms such as Komatsu. High-tech shares such as Kyocera gained in the wake of gains by their U.S. peers, though Panasonic bucked the trend by falling over 4 percent after a source said it would slash its profit forecast.
Seoul shares ended up 3.3 percent with banks continuing a rally on the prospect of improved liquidity, helped by a Chinese rate cut, while some techs such as Hynix Semiconductor rallied on hopes the industry may have reached a bottom.
Australian shares finished 1.4 percent higher, led by top miner BHP Billiton on strong metals and oil prices, with China's big interest rate cut also raising hopes for a revival in demand for commodities. QBE Insurance Group bucked the trend, falling 2.2 percent after a A$2 billion ($1.31 billion) capital raising, while debt-laden property trusts dropped on concerns about
further capital raisings.
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Hong Kong shares gained 1.4 percent in their third straight day of gains, riding on the back of China's steepest rate cut in more than a decade, which helped mainland property counters rack up double-digit percentage gains. China Overseas Land Investment surged 7.6 percent, with China's higher-than-expected 1.08 percentage point interest rate cut -- its fourth since mid-September -- coming as a shot in the arm for the ailing property sector. Guangzhou R&F Properties soared 24 percent, while China Resources Land shot up over 11 percent at one point.
Singapore's Straits Times Index closed flat. Shares of construction firm Yongnam Holding gained as much as 14.3 percent after it won a S$23.8 million ($16 million) contract to
build bridges and canopies for the Marina Bay Sands casino.
Chinese stocks rose 1.1 percent after the central bank's biggest monetary easing in a decade, but the market came well off its highs after running into technical resistance. Interest rate-sensitive property shares were among the biggest gainers, with Vanke up after rising its 10 percent daily limit at one stage.