Asian Markets Soar on European and UK Central Bank Decisions
After decisions by the European Central Bank and the Bank of England to keep interests low, Asian markets surged higher in early trading - Corolla Financial
Online, July 5, 2013 (Newswire.com) - The ECB decided to keep interest rates at record lows and suggested it could further cut rates, if necessary. The Bank of England cautioned investors that they should not expect higher rates in the near future.
The Japanese Nikkei touched a five week high, up 1.7 percent, and the Hang Seng rose 1.82 percent to 20,840.52. Australia's S&P/ASK moved 0.8 percent to a two week high, and the Shanghai Composite index moved 0.67 percent. Of the group only South Korea's Kospi fell, and only by 0.26 percent.
US financial markets were closed Thursday the 4th of July for the American Independence Day holiday, but the government will put out non-farm payrolls data later, which is expected to influence the US Federal Reserve's decision on its bond purchases. The Fed has indicated that it could begin trimming its $85bn a month bond-buying program later this year if the American economy improves, and the Fed believes that the US economy will show significant signs of improvement in the last half of 2013.
Some of the big gainers in Asia included Kobe Steel and ferronickel producer Sumco gaining over 6% each in Tokyo. Hitachi jumped 4.4 percent, Mitsubishi Electric gained 3.5 percent, and Fast Retailing added 3.1 percent. Panasonic moved up 3 percent on news that it proposes to shut down a European solar-cell plant as part of its restructuring strategy.
In Hong Kong, state-owned coal miner China Shenhua Energy shot up 6.7 percent. Bank of East Asia gained 2.6 percent, and China Overseas Land and Investment moved up 2.5 percent. Macau Legend Development gained on its first day of trading. The stock rose to 2.43 Hong Kong dollars (31.2 US cents), up from its IPO price of HK$2.35.
In Shanghai, realty firm Merchants Property surged 7 percent while rival Poly Real Estate shot up 6 percent. Everbright Bank and Bank of Nanjing inched up 0.5 percent.
In Sydney, casino operator Crown shot up 4 percent on news that it received a conditional approval for a VIP gaming room at its luxury hotel. Rival Echo Entertainment dropped 4 percent on the news. Iron ore miner Fortescue Metals added 2.9 percent, BHP Billiton gained 1.3 percent and Anglo-Australian miner Rio Tinto inched up 0.8 percent.
In Seoul, index heavyweight Samsung Electronics dropped 4 percent on news that it expects profit to increase 47 percent in the second quarter, which is lower than market forecasts. KB Financial Group moved up 2.2 percent. Shares of both Kia Motors and Hyundai Merchant Marine gained 2 percent each. Memory-chip maker LG Display lost 2 percent, while consumer electronics maker LG Electronics shed 1 percent.