Asia stocks gain
Asian stock markets rose Wednesday after the Federal Reserve signaled that it is all but certain to take steps to boost the U.S. economy and Japan’s machinery orders unexpectedly grew.
Oil prices rose above $82 a barrel as a weaker U.S. dollar made crude cheaper for investors holding foreign currencies.
Investors also took heart from Intel Corp.’s better-than-expected earnings results, which came after the closing bell Tuesday. Intel said its net income for the third quarter leaped 59 percent and sales rose 18 percent, both beating analyst expectations.
Japan’s benchmark Nikkei 225 stock index gained 59.62 points, or 0.6 percent, to 9,448.26. South Korea’s Kospi added 0.3 percent to 1,872.83. Australia’s S&P/ASX 200 was up 0.2 percent at 4,628.50.
Hong Kong’s Hang Seng index was little changed at 23,122.28 following a policy speech by Hong Kong chief executive Donald Tsang, who reportedly said that real estate investment will no longer be considered a criteria for people applying to immigrate to the territory.
Kwong Man Bun, chief operating officer at KGI Asia Ltd. in Hong Kong, said shares of real estate — the biggest industry in Hong Kong — took a hit after the speech.
“This had a negative affect, as it was a little bit unexpected,” Kwong said.
The Shanghai Composite Index was also little changed. Markets in Taiwan, New Zealand and Singapore advanced.
Meanwhile, Japan’s machinery orders, a closely watched indicator of future business investment, unexpectedly jumped due to one-time purchases in August, marking the third straight month of growth, the government said Wednesday.
Japan’s core machinery orders in August rose 10.1 percent from the previous month to 843.5 billion yen (US$10.3 billion), the Cabinet Office said. The August result was far better than a 4.0 percent drop projected by economists.
Sentiment was upbeat across Asia after the minutes from the Fed’s meeting on Sept. 21 suggested the U.S. central bank is moving toward a consensus on what steps to take to shore up a recovery in the world’s No. 1 economy at its next meeting in early November.
Wall Street has been eagerly awaiting the Fed’s decision to purchase government debt, known officially as quantitative easing. The minutes showed the Fed was concerned that the economy was growing slower than it had expected. Fed officials said in the minutes that they were prepared to provide additional relief “before long.” Traders took that as a strong sign that the Fed is ready to act.
Global stocks have rallied in recent weeks as investors bet the Fed will enact the bond-buying program in early November. Buying bonds would drive interest rates and yields even lower, which makes stocks a more attractive investment.
In New York on Tuesday, the Dow Jones industrial average rose 10.06 points, or 0.09 percent, to 11,020.40.
In currencies, the dollar dropped to 81.75 yen from 81.84 yen in New York late Tuesday. The U.S. currency hit a 15-year-low of 81.37 yen on Monday. The euro rose to $1.3969 from $1.3912.
Benchmark oil for November delivery was up 55 cents to $82.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 54 cents to settle at $81.67 on Tuesday.
Source: AP