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| | GEO Business | | Asian stocks hit 11-week high, technology leads | Updated at: 1833 PST, Thursday, April 01, 2010
HONG KONG: Asian stocks rose to an 11-week high on Thursday as China's manufacturing industry picked up and foreign buying boosted the technology heavy markets of Taiwan and South Korea.
Japan's Nikkei average rose to a new 18-month closing high half with the yen's recent downtrend boosting exporters.
Traders predicted more gains for the benchmark in the new quarter in spite of signs of strains on technical charts.
The dollar was steady against the yen compared to late U.S. trading on Wednesday at 93.47 yen, having touched a three-month high of 93.65 yen earlier in the day.
Oil hit an 18-month high well above $84, breaking previous trading ranges and drawing in fresh inflows from investors at the start of the new quarter.
MSCI's index of Asia-Pacific shares outside of Japan rose about 1.4 percent, hitting its highest since mid-January. This marks a solid start to the second quarter after the benchmark gained 1.5 percent in the three months to March 31.
Analysts say Asia was merely in catch-up mode. Technology and consumer durables stocks were the big gainers as foreigners bought stocks that have underperformed this year.
"Our markets have underperformed and I think it is premature to worry about too much money coming into the region," said Geoff Lewis, head of investment services at JP Morgan Asset Management.
Compared with Asian shares, world stocks measured by the MSCI All-Country World Index were up 2.7 percent in the first quarter, while emerging market shares were up 2 percent.
The mood among investors was boosted by two business surveys which showed China's manufacturing moved up a gear in March as orders climbed, pointing to brisk first-quarter GDP growth.
HSBC's China Purchasing Managers' Index, or PMI, showed first-quarter manufacturing output expanded at the briskest clip in the survey's six-year history.
The official purchasing managers' index rose to 55.1 in March from 52.0 in February, beating the market consensus of 54.5.
Technology dominated markets of Taiwan and South Korea were among the leading performers with foreign buying boosting the stock markets in Seoul and Taipei on bullish earnings expectations.
"Foreign investors coming in now seem to be long-term funds. Normally they had been more defensive players, but their more active buying is actually lifting the broader market," said Choi Kwang-hyeok, a market analyst at Hanwha Securities.
Funds tracker EPFR Global said investor appetite for exposure to emerging markets took global emerging markets equity fund flows to a 10-week high and flows into emerging bond funds to their second best week ever in the period to March 24.
The stock market benchmarks in Taiwan and South Korea closed at a 10-week high.
Although the data released in China triggered expectations of 11 percent plus growth in the first quarter which could lead to tightening by authorities, those fears were kept in check by comments from the central bank reaffirming its monetary stance.
In a statement released a day after the quarterly meeting of its monetary policy committee, the People's Bank of China vowed to maintain appropriate credit growth which took stocks in Shanghai and Hong Kong to their highest in over two months.
The Shanghai Composite index rose 1.2 percent while in Hong Kong the China Enterprises Index of top locally listed mainland Chinese stocks rising 2.4 percent to its highest in more than two months after Goldman Sachs recommended China's Hong Kong-listed companies as a top trade on cheap valuations and a strong outlook for economic growth.
"We sense that Chinese equities have fallen off investors' radars somewhat, positioning is light, and sentiment is, at best, skeptical, making us all the more keen to get involved," the Goldman report said while highlighting robust economic growth and "undemanding" price-earnings multiples.
Hong Kong's benchmark Hang Seng index rose 1.4 percent to its highest close since Jan. 19.
Materials also received a boost from M&A activity in Australia's sizzling commodities sector.
Australia's Lihir Gold surged by a third to a two-year high after rejecting a takeover offer from the country's top gold miner, Newcrest Mining. The deal followed a bid on Wednesday for Macarthur Coal from Peabody Energy, which was also rejected.
The top stock index in Australia rose 0.7 percent, while India gained 0.9 percent.
In Southeast Asia, strong foreign buying lifted stock markets in the two biggest economies.
Thailand's benchmark stock market index hit a near-two-year high while Indonesia's benchmark index rose nearly 2 percent within sight of its record high struck in January, 2008. |  |
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