Asia Markets

Asia markets jump after Wall Street rally; Nikkei at highest levels since January

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Asian markets rose Thursday, after major U.S. indexes had a banner session to hit record highs overnight, ahead of the European Central Bank's last interest rate decision for the year.

Down Under, the ASX 200 closed up 1.2 percent, or 65.5 points at 5,543.6, with its materials sub-index up 1.48 percent and the financials sub-index up 1.69 percent. Australia reported trade balance data for October, with a deficit of 1.541 billion Australian dollars ($1.2 billion), wider than the A$800 million gap forecast.

Asian markets open in the green

Japan's benchmark rose to its highest levels this year shrugging off a stronger yen, closing up 1.45 percent or 268.78 points at 18,765.47. The dollar/yen was trading at 113.48 as of 2:35 pm HK/SIN, versus levels around 114 yesterday.

Japan's third-quarter economic growth was revised down to 1.3 percent year-on-year, from the preliminary reading of 2.2 percent. A Reuters poll of economists had expected growth to be revised up to 2.4 percent.

Sony was up 1.94 percent at 3,261 yen, after the Japanese conglomerate said late on Wednesday that it would release eleven new smartphone games in Japan next year, and introduce companion gadgets.

SoftBank's stock gained 5.48 percent to 7,792 yen, as investors continued to cheer news on Tuesday that SoftBank CEO met up with U.S. President-elect Donald Trump and pledged to invest $50 billion in the U.S.

Elsewhere, South Korea's Kospi finished up 1.97 percent or 39.18 points at 2,031.07 while Hong Kong's jumped 0.44 percent by mid-afternoon.

Hong Kong-listed HSBC fell 0.61 percent at $65.10, paring off a 16-month high at HK$67.25.. The stock shot up 6 percent on Wednesday. Morgan Stanley upgraded the banking stock to an overweight rating with a target price of HK$64 on Tuesday, citing an improved revenue outlook as a Federal Reserve rate hike would benefit most Hong Kong banks.

The probability of a Fed move in December is at 92.7 percent, according to CME Group 30-Day Fed Fund futures.

China's November dollar-denominated imports grew 6.7 percent, the fastest pace of annualized growth since September 2013, while exports were up 0.1 percent in dollar terms. A Reuters poll of analysts had expected November exports to have fallen 5 percent from the previous year, while imports were forecast to drop 6.2 percent.

The trade data had missed the expected release time by several hours.

Chinese shares were lower, with the closed 0.2 percent lower or 6.51 points at 3,215.72 and the Shenzhen composite finished off 0.62 percent or 12.95 points at 2,077.37.

Investors are likely to eye the European Central Bank's interest rate decision due later in the day, when the central bank is expected to announce a six-month extension to its bond-buying program, according to a Reuters poll.

But one analyst warned that there's high chance that the ECB would disappoint markets.

"Apart from Mario Draghi's decision on the QE program, markets will also react to the bank's latest growth and inflation forecast. Their inflation forecast for 2019 (1.8 percent) may still remain below their target level of 2 percent. The bank may also ax its inflation forecast for 2017 from 1.6 percent to 1.5 percent," said Naeem Aslam, chief market analyst at ThinkMarkets, in a note on Thursday.

"The bar for disappointment is really high and the bank really needs to deliver on all angles to satisfy the markets," Aslam added.

The euro was fetching $1.0763 as of 3:05 pm HK/SIN, ahead of the ECB decision. One week earlier, it was hovering weaker at around $1.066.

"The big question is whether there will be an ECB surprise that triggers the same 4-cent (400 basis point) move in euro/dollar that we saw in December 2015," Kathy Lien, managing director of FX strategy at BK Asset Management, said in a note on Thursday.

Lien said the market was looking to see if the central bank would scale back its asset purchases, and if it did, there would be pressure on the euro/dollar.

ECB stimulus will likely continue: Pro

During Asian trade, U.S. crude futures were up 0.26 percent at $49.90 a barrel and Brent futures traded up 0.06 percent at $53.03. Oil prices came under pressure on Wednesday in the U.S. from bearish U.S. crude inventory data and doubts that the Organization of Petroleum Exporting Countries and Russia would come through with the promised output cuts.

Overnight, the closed up 1.55 percent at 19,549.62, the 12th all-time high close since the U.S. election. The S&P 500 rose 1.32 percent to 2,241.35, also a record close, and the composite finished up 1.14 percent at 5,393.76.

The dollar index, which measures the greenback against a basket of currencies, was tradng 100.12 as of 3:05 pm HK/SIN, below 101 levels seen last week.

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