Asian Markets Surge, Boosted by Auto Stocks
Asian markets surged Thursday, with investors seeing a sliver of hope the U.S. economy has bottomed, while the euro edged up before a European Central Bank meeting at which rates may be cut for the last time in a while.
Auto stocks led the advance. Nissan Motor shares closed up a whopping 13 percent, Toyota up 5.5 percent and Hyundai Motor up 4.4 percent as hopes continued that General Motors could avoid a messy failure and some analysts citing reports industry-wide U.S. sales fell for the 17th consecutive month in March but by less than some feared.
That combined with a pickup in new orders according to a U.S. survey of manufacturing activity and the highest volume of home loan applications since mid-January supported a view that the worst for the global economy may have passed.
However, reports showing the world's biggest economy continued heavily to bleed jobs in the last few months tempered optimism about when consumer demand for Asia's exports would recover, keeping gains in commodities contained. Furthermore, leaders at a G20 summit were dividedon the need for more stimulus to support efforts underway already.
The euro inched up in quiet trade, though dealers were mainly waiting for the outcome of an ECB meeting, expecting the benchmark rate to be cut to a record low 1 percent. U.S. crude futures rose to just above $49 a barrel as further supply cuts by OPEC in March offset U.S. data showing a higher-than-expected rise in crude stocks.
Japan's Nikkei 225 Average closed 4.4 percent higher as automakers surged on growing optimism about the U.S. economy after a string of better data than expected. Banks such as Mizuho Financial Group gained on short-covering after recent sharp falls, while signs that foreign investors are becoming more active buyers also helped boost overall sentiment. Exporters were also on the advance with Sony ending 9 percent higher.
South Korea's KOSPI finished up 3.5 percent, posting its highest close in 5-½ months, helped by stronger-than-expected U.S. economic data, with techs such as Samsung Electronics, up 3.6 percent,leading the advance. Investors largely shrugged off the news that North Korea had begun fueling a long-range rocket, with foreign investors continuing to pick up domestic stocks for a second straight session.
Australian shares climbed 2.8 percent to their highest close in 11 weeks. Qantas Airways shares rose 6.4 percent after saying it had changed the ownership structure of Singapore-based Jetstar Asia and Valuair to provide a new platform for growth.
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Hong Kong shares leapt 7.4 percent, with HSBC leading the charge as encouraging U.S. data sparked a broad-based rally while China stocks also soared after the Shanghai index breached a major technical barrier. Shares in HSBC were up 15.3 percent as the technical overhang related to its massive $18 billion rights issue, announced in March, subsided. The stock fell 19 percent in March, far underperforming the 6 percent rally on the main index.
Singapore's Straits Times Index jumped 5.9 percent. Shares of Olam rose 16 percent after benchmark Malaysian palm oil futures went up by 3.5 percent on Wednesday to
their highest close in more than six months.
China's Shanghai Composite Index rose 0.7 percent to a fresh seven-month high, led by financial and property shares, as strong overseas stock markets encouraged investors to bet on a Chinese economic recovery.