By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Asian stocks rallied Friday, cheering
a rebound on Wall Street and upbeat German manufacturing data, with
Japanese shares leading the charge on the back of a weakened
yen.
Australia's S&P/ASX 200 gained 1%, South Korea's Kospi added
1.3%, Hong Kong's Hang Seng Index rose 0.6%, and China's Shanghai
Composite advanced 0.3%.
Japan's Nikkei Stock Average was the region's strongest
performer, jumping 2.4% as the U.S. dollar (USDJPY) climbed toward
the Yen99-level and after a Reuters survey showed local
manufacturers' optimism rose to the highest level in three
years.
The performance helped the Nikkei Average, the Shanghai
Composite and the S&P/ASX 200 all erase losses they had
accumulated earlier in the week.
Global equity markets were rocked recently due to uncertainty
surrounding the Federal Reserve's bond-purchase program, with
emerging markets in particular hit by worries that reduced stimulus
from the U.S. central bank would spur foreign fund outflows from
the region.
ING Financial Markets economist Tim Condon said a tapering of
the $85 billion-a-month in Fed stimulus could result in a rapid
repricing of U.S. Treasury yields, lifting the 10-year yield
(10_YEAR) by about 1.50 percentage point in about two quarters.
However, "once it's over, the economic fundamentals ... will
reassert themselves as the drivers of financial-asset prices. We're
not there yet, and contagion could still cause a
balance-of-payments crisis in an emerging market with a too-large
current-account deficit," Condon said.
Stock gains in Tokyo were spread across sectors, with Yamaha
Motor Co. (7272.TO) climbing 4.9%, Citizen Holdings Co. gaining
3.4%, Kawasaki Heavy Industries Ltd. (KWHIF) adding 4.9%, Sumitomo
Metal Mining Co. advancing 4.3% and banking giant Mitsubishi UFJ
Financial Group Inc. (MTU) rising 2.9%.
Mitsubishi Motors Corp. (MMTOY) advanced 3.4% after the Nikkei
newspaper reported it planned to build an automobile plant in the
Philippines by around 2015.
The advances also followed a higher finish for the Dow Jones
Industrial Average (DJI), which snapped a six-day losing streak
overnight after a monthly average of jobless claims fell to a more
than five-year low in the U.S., and as manufacturing Purchasing
Managers' Index readings from China and Germany indicated
expansion.
"The fact that the U.S. and European recoveries are improving
(albeit fractionally) is a good foundation for global markets, but
investors firstly have to get through the removal of the price
distortions that quantitative easing created," said Perpetual
investment market-research chief Matthew Sherwood.
In Sydney, mining major Rio Tinto Ltd. (RIO) rose 1.1%, while
Fortescue Metals Group Ltd. (FSUMY) jumped 3.5%, extending its
post-earnings advance from Thursday.
A more-than-1% climb for Nymex crude futures overnight aided the
region's energy producers. Woodside Petroleum Ltd. (WOPEY) gained
1.4% in Sydney, Inpex Corp. (IPXHF) climbed 2.1% in Tokyo, and
PetroChina Co. (PTR) added 0.4% in Shanghai.
Meanwhile, gains in Hong Kong were supported by post-earnings
buying in a few stocks.
Kunlun Energy Co. (CNPXF) added 1.5% after the company posted a
5% increase in its first-half profit, while Henderson Land
Development Co. (HLDCY) advanced 2.7% despite a modest decline in
its profits.
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