Bangkok: Asian stock markets rose Thursday after an unexpectedly strong US housing report renewed confidence in the world’s biggest economy and the latest data from China suggested the worst of its slump is over.
The US Commerce Department said builders started construction on new single-family houses and apartments at the fastest pace in more than four years. Housing starts surged to an annual rate of 872,000 in September, far above estimates. Housing is crucial to any economic recovery in the US and the figures offset the gloom from some mediocre earnings reports.
China, meanwhile, released figures that showed its worst economic slowdown since the 2008 global crisis levelled out in the third quarter while retail sales improved. The world’s No. 2 economy grew 7.4 per cent — still slower than the previous quarter’s 7.6 growth but declining at a much gentler rate than before.
“The expectation now is that China’s economy has bottomed out and we can look forward to better results in the fourth quarter,” said Francis Lun, managing director of Lyncean Holdings in Hong Kong.
The US and Chinese numbers are rare good news for a global economy that has been weighed down by Europe’s chronic debt crisis and sluggish American growth. But analysts at DBS Bank Ltd in Singapore said it remains to be seen whether the housing data represents the start of a real US recovery.
“One thing’s for sure: nowhere else do you see this sort of growth in the economy. If for that reason alone, it’s worth watching,” DBS said in a market commentary.
Japan’s Nikkei 225 index rose sharply, by 2 per cent to 8,982.31. Hong Kong’s Hang Seng added 0.6 per cent to 21,546.05 and South Korea’s Kospi gained 0.1 per cent to 1,956.70. Australia’s S&P/ASX 200 advanced 0.9 per cent to 4,567.
Benchmarks in mainland China, Indonesia, Thailand and Singapore also rose. Taiwan’s fell.
Heavy industrial stocks were among the region’s big gainers. Japanese heavy equipment maker Komatsu Ltd. rose 3.6 per cent and Hitachi Construction Machinery gained 3 per cent. South Korea’s Hyundai Heavy Industries advanced 3.3 per cent.
The positive US data and the apparent tapering off of China’s slowdown helped Australian resource shares, which depend heavily on demand fueled by global growth. BHP Billiton Ltd., the world’s largest mining company, gained 3.3 per cent. Rio Tinto Ltd. surged 4.7 per cent. OZ Minerals advanced 5.5 per cent.
Hopes that Spain’s debt calamity might ease grew ahead of a meeting of European Union leaders in Brussels later Thursday to discuss the region’s financial crisis.
Markets are hoping that Spain will seek help to keep its borrowing costs down. The government in Madrid has been reluctant to do so because such aid could damage the country’s image and also compel it to comply with onerous conditions.
On Wall Street, the Dow Jones industrial average rose 0.1 per cent to close at 13,557 on Wednesday. The Standard & Poor’s 500 index rose 0.4 per cent to close at 1,460.91. The Nasdaq composite index rose 0.1 percent to close at 3,104.12.
Benchmark oil for November delivery was up 2 cents to $92.14 per barrel on the New York Mercantile Exchange. The contract rose 3 cents to finish at $92.12 per barrel on the Nymex on Tuesday.
In currencies, the euro fell to $1.3097 from $1.3123 late Wednesday in New York. The dollar rose to 79.13 yen from 78.97 yen.
