Asia Markets

Asian stocks rally on hopes of delayed US rate hike

A man pushing a bicycle walks past a share prices board illustrating stocks on the Tokyo Stock Exchange in Tokyo.
Yoshikazu Tsuno | AFP | Getty Images

Asian stocks marched higher on Thursday, with beaten-down commodity plays stabilizing after weak U.S. data overnight heightened expectations that the Federal Reserve will hold off raising interest rates.

"Asia is loving the bad U.S. economic data. The lower U.S. dollar was taken as a boon for the region as it increased the relative value of commodity exports and lowered repayments on USD-denominated bonds for corporates in the region. With many Asian currencies and equity markets heavily influenced by commodity markets, this also saw the energy and materials sectors performing strongly across the region," IG's market analyst Angus Nicholson wrote in a note.

Wall Street finished in the red overnight, as investors digested mixed results from the banking sector as well as the release of lower-than-expected sales forecasts for fiscal 2016 by Wal-Mart.

The dropped nearly 1 percent, ending below the psychologically key level of 17,000 for the first time since October 7, on the back of declines in Wal-Mart and Boeing. The S&P 500 and Nasdaq Composite ended 0.5 and 0.3 percent lower respectively.

China markets positive

Share markets in China rose across the board to recover Wednesday's losses, with the Shanghai Composite closing up 2.3 percent.

But small-caps were the outperformers; the Shenzhen Composite rose 3 percent, while the start-up ChiNext board surged nearly 4 percent.

Anyuan Coal Industry rose by the daily maximum allowable of 10 percent, lifted by a disclosure in the miner's quarterly report that China's state investment firm and margin lender had become its major shareholders.

Hong Kong's Hang Seng index leaped nearly 2 percent, with banks, securities and gaming shares attracting hefty buy orders.

China Southern Airlines soared 2.6 percent in Hong Kong, getting a lift from an announcement that earnings for the first nine months of 2015 will likely increase four-fold from the corresponding period a year earlier.

In other news, China's economic planner said it approved 218 fixed-asset projects worth 1.81 trillion ($285.33 billion) in the first nine months of the year, as Beijing stepped up efforts to support the stumbling economy.

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Nikkei bounces 1.1%

Japan's Nikkei 225 index turned positive to reclaim the 18,000-point mark. The Tokyo bourse had finished under the level for the first time since October 2 in the previous session.

A tick down in dollar-yen probably encouraged risk appetite for exporters, with blue chips such as Toyota Motor and Sony paring earlier declines to rise 0.9 and 1.6 percent respectively.

Counters which came under pressure due to their heavy exposure to China, also recovered their footing. Fast Retailing, owner of clothing brand Uniqlo, advanced 0.3 percent, while steel producers JFE Holdings and Nisshin Steel bounced over 1 percent each.

Bucking the trend, shares of Asahi Kasei tanked 13 percent on the back of news that its subsidiary performed faulty installation of a portion of foundation piles in work for a Yokohama apartment complex, Reuters reported.

ASX gains 0.6%

Australia's S&P ASX 200 index snapped a three-session losing streak, as the key resources sector enjoyed some reprieve following a sharp sell-off in previous sessions.

BHP Billiton and Rio Tinto rallied 1.8 and 2.3 percent respectively, while Fortescue Metals elevated nearly 6 percent on the back of news that the miner's production costs were beating its fiscal 2016 target.

Evolution Mining rocketed as high as 10 percent before trimming gains to 6.7 percent, as gold prices hit a three-and-a-half-month peak overnight. Newcrest Mining and Kingsgate Consolidated closed up 5.6 and 3 percent respectively.

Energy producers also recovered some lost ground, with shares of Oil Search and Santos up 3.6 and 2.7 percent respectively.

A string of corporate news released before the market open were also eyed. Insurance Australia Group (IAG) piled on 6.8 percent on the back of news that it plans to pause further investments in China. A statement released by the insurer on Thursday said that IAG will be pursuing "further growth opportunities in other Asian markets and our core businesses in Australia and New Zealand."

Australia and New Zealand Banking Group (ANZ), which said it will be selling its New Zealand medical insurance business to NIB NZ, slipped 0.3 percent.

On the domestic data front, Australia lost 5,100 jobs in September, a modest miss from forecasts of a 5,000 rise, but unemployment held steady at 6.2 percent. The Australian dollar softened by a quarter of a U.S. cent following the data, but has since recovered to trade at $0.7347 versus the dollar.

Australia jobs data 'not too bad'

Kospi rises 1.2%

South Korea's Kospi index touched more than two-month highs, after the Bank of Korea (BOK) left interest rates unchanged for a fourth straight month, in line with expectations.

The decision to keep interest rates at a record low 1.50 percent was unanimous, Governor Lee Ju-yeol told a news conference. The shot up more than 1 percent to 1,133.8 against the greenback following the announcement, but has since surrendered some gains to last trade at 1,126.3.

Bargain hunters swooped in on battered refiners, with shares of SK Innovation and S-Oil jumping 4 and 3 percent respectively.

The bourse's top weighted stock Samsung Electronics rallied 1.2 percent.

Lotte Group shares were in focus following new developments in a family feud that has shrouded the country's number 5 conglomerate in recent months. On Wednesday, chairman Shin Dong Bin lost his directorship at Japan-based Kojunsha Corp, the group's virtual holding firm, in the latest move taken by his older brother Shin Dong-joo amid a power struggle over control of the group.

Lotte Shopping and Lotte Chemical rose 2.3 and 5 percent respectively, but Lotte HiMart eased 0.8 percent.

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JKSE up 1%

Indonesian shares finished the day 0.5 percent higher, while the rupiah jumped 2 percent to hover near its strongest level since June, after the central bank held its benchmark interest rate steady on Thursday, meeting expectations.

All analysts in a Reuters poll had expected the central bank to keep the policy rate at 7.50 per cent, where it has been since February.