Asian markets and the Australian dollar rose Tuesday — the last day of the second quarter —as investors kept adding to bets global economic activity is rebounding, having driven Chinese shares to the highest in a year.
A tremendous shift by investors out of cash and low-yielding money market instruments into riskier assets, particularly in Asia, has been driving equity valuations and currencies in the region higher. However, the third quarter could be a time of reckoning if higher raw materials prices snuff out a nascent recovery.
The U.S. dollar slipped as momentum kept dealers rolling out of trades based on safety after a 7 percent drop on the quarter, keeping commodity prices supported. The Australian dollar was one of the biggest outperforming currencies on Tuesday, up 0.6 percent to $0.8120. Oil rose sharply to 8-month highs, though a lack of news suggested dealers were focused on quarter-end activity. Oil futures climbed above $73 a barrel.
Japan's Nikkei 225 Average rose 1.8 percent to finish the April-June quarter up 23 percent, its best quarter since July-September 1995, buoyed by growing hopes that the worst of the global economic recession may be over. The Nikkei briefly hit 10,000 for the first time in two weeks, with Fujifilm Holdings surging after Mizuho Securities upgraded the company's shares.
Seoul shares ended a touch higher with a set of domestic data helping sentiment, but the
index was tempered by declines in automakers due to strike worries and in Daewoo Engineering.
Australian shares rose 1.8 percent, capping its best quarterly performance since 2006, as an earnings upgrade by retailer David Jones backed hopes the economic recovery may be gathering pace.
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Hong Kong shares sealed their biggest quarterly gain in more than 15 years, but edged 0.8 percent lower by the close. BOC Hong Kong, the local unit of China's No.3 lender Bank of China climbed 2.4 percent a day after China and Hong Kong signed a memorandum to launch yuan trade settlement in Hong Kong.
Singapore's Straits Times Index rose 0.7 percent. Shares rose on U.S. and regional leads. Industrials and commodity-linked plays led the gains.
China's Shanghai Composite Index secured a gain of 25 percent for the quarter and 13 percent for the month, boosted by signs of economic recovery and ample liquidity in the financial markets. But the index edged 0.5 percent lower by the close.