Hong Kong: Asian markets mostly rose on Wednesday as dealers welcomed another batch of strong US data while China’s central bank said it had moved to ease a liquidity crisis that has gripped the country’s financial markets.
Traders breathed a sigh of relief after the People’s Bank of China (PBoC) late Tuesday said it had made money available to some firms in a bid to prevent a cash crunch that had sent shares into a tailspin.
However, Japanese shares gave up initial gains and ended in negative territory as the dollar’s rally against the yen petered out, while Shanghai remained on edge.
Hong Kong added 2.43 per cent, or 482.83 points, to end at 20,338.55 while Sydney ended 1.63 per cent higher, climbing 75.7 points to 4,731.7, while Seoul rose 0.16 per cent, or 2.82 points, to close at 1,783.45.
Philippine stocks led the rally in emerging markets, which have tumbled in recent weeks on expectations of an end to the surge in investment that had been attributed to the US Federal Reserve’s stimulus scheme.
Manila jumped 5.70 per cent, or 329.88 points, to 6,118.94, while in the afternoon Jakarta was up 3.72 per cent.
However, Tokyo fell 1.04 per cent, or 135.33 points, to 12,834.01 and Shanghai lost 0.41 per cent, or 8.01 points, to end at 1,951.50.
Mumbai meanwhile fell 0.41 per cent or 77.03 points at 18,552.12 points, as the local rupee tumbled to a fresh lifetime low. The rupee hit 60.51 against the dollar in afternoon trade Wednesday, past its previous record low of 59.98 to the greenback last week.
Capital Securities analyst Jacky Zhang told Dow Jones Newswires: “Investors are worried about financial risks if more problems pop up in the banking system.”
Global markets - already reeling after the Fed last week indicated it would soon begin to wind up its stimulus - have tumbled as China’s lenders were hit by a credit squeeze, stoking concerns for its wider economy.
The PBoC had as recently as Monday ruled out providing fresh cash and ordered banks to put their financial houses in order.
But on Tuesday it said in a statement it had offered funds to some financial institutions in recent days and would continue to do so.
A central bank official said earlier Tuesday that it would “guide market interest rates (that banks charge to lend to each other) into a reasonable range”.
The move came after shares tanked almost six per cent in intra-day trade on Tuesday, which added to the previous day’s 5.3 per cent plunge. Shanghai ended Tuesday just 0.19 per cent lower.
Interbank rates surged into double figures late last week but have since eased.
In New York, Wall Street’s three main indexes enjoyed a positive day thanks to data showing more strength and confidence in the US economy and as worries over China abated.
Figures showed new orders for durable goods surged 3.6 per cent in May on the back of aircraft sales, while house prices rose a huge 2.5 per cent in one month. In addition, the Conference Board’s consumer confidence index jumped to 81.4, up from 74.3 in May.
The Dow rose 0.69 per cent, the S&P 500 added 0.95 per cent and the Nasdaq was 0.82 per cent higher.
While the news will increase expectations the Fed will start to scale back its bond-buying to support the economy, it also shows it is gaining strength.
After weeks of selling in spite of signs of stronger growth, “we may be at a point where good news is good news”, said Art Hogan of Lazard Capital Markets in the US.
The figures also lent support to the dollar in the morning but the unit retreated in the afternoon and it was sitting at 97.45 yen from 97.80 yen in New York late Tuesday. The euro bought $1.3069 and 127.27 yen against $1.3083 and 127.95 yen.
Oil prices fell, with New York’s main contract, West Texas Intermediate light sweet crude for delivery in August, down 74 cents at $94.58 a barrel and Brent North Sea crude for August shedding 47 cents to $100.79.
Gold fetched $1,229.13 per ounce by 1100 GMT, from $1,283.31 late Monday.
In other markets:
- Taipei rose 1.59 per cent, or 121.57 points, to 7,784.80.
Hon Hai rose 3.99 per cent to Tw$73.0 while Taiwan Semiconductor Manufacturing Company added 0.5 per cent to Tw$101.5.
- Wellington finished up 1.77 per cent, adding 76.61 points to 4,393.61.
Fletcher Building gained 2.6 per cent to NZ$8.41 while Telecom put on 3.4 per cent to NZ$2.28 but OceanaGold ended down 10.7 per cent at NZ$1.34.
- Bangkok added 2.87 per cent or 39.75 points to 1,424.38.
Airports of Thailand jumped 10.39 per cent to 154.00 baht, while power firm Electricity Generating rose 6.02 per cent to 132.00 baht.
- Kuala Lumpur rose 12.12 points, or 0.70 per cent, to close at 1,740.76.
Genting gained 3.8 per cent to 10.30 ringgit while YTL Corp ended 1.9 per cent higher at 1.64. Top Glove lost 2.2 per cent to 6.15 ringgit.
- Jakarta ended up 3.82 per cent, or 168.86 points, at 4,587.73.
Food manufacturer Indofood Sukses Makmur rose 8.66 per cent to 6,900 rupiah, while lender Bank Permata fell 2.37 per cent to 1,650 rupiah.
- Singapore was up 0.47 per cent, or 14.47 points, to 3,104.40.
United Overseas Bank was down 0.81 per cent to Sg$19.49 while oil rig maker Keppel Corp gained 1.15 per cent at Sg$10.54.