Asia markets surge after Wall St rally
October 20, 2014
However, while the gains will come as some relief after the ups and downs of last week, traders are nervously watching the release of Chinese economic growth data later in the week fearing another weak report.
Tokyo surged 3.40 percent, Hong Kong jumped 1.00 percent, Sydney added 0.90 percent and Seoul climbed 1.44 percent while Shanghai was flat.
Investors took their lead from Wall Street, where the three main indexes saw healthy advances Friday on bargain-buying and following upbeat earnings from General Electric and Morgan Stanley.
The Dow added 1.63 percent, the S&P 500 jumped 1.29 percent and the Nasdaq gained 0.97 percent.
Adding to buying sentiment were comments from officials at the US and British central banks at the end of the week.
On Thursday, James Bullard, head of the St Louis branch of the Federal Reserve, suggested it could extend its bond-buying programme rather than winding it down, as had been expected.
And on Friday, Bank of England chief economist Andrew Haldane said recent economic weakness implied the need for a slower approach to raising rates.
The two banks have been considering hiking interest rates in the past few months as their respective economies have slowly been picking up. However that has spooked traders as other economies, including the eurozone, China and Japan, have been struggling.
On foreign exchange markets the dollar climbed to 107.17 yen, compared with 106.78 yen in New York and well up from the 106.22 yen earlier Friday in Asia.
The euro fetched 136.77 yen against 136.28 yen in US trade, while it was also at $1.2764 compared with $1.2759.
However, there are still ongoing worries about the world economy.
Naoki Fujiwara, fund manager at Shinkin Asset Management said: "Global markets, faced with renewed slowdown fears, are far from stable, and will only recover if and when economic growth data and policy directives are reassuring enough to entice investors out of their current ´risk-off´ mode. Stock prices are cheap, but can get cheaper still."
Eyes are now on China, which releases third-quarter gross domestic product (GDP) data Tuesday, with expectation for another weak reading following a recent string of underwhelming reports, including on industrial output, inflation and trade.
"There is a broad consensus that growth decelerated to its slowest pace since the Great Recession," says Credit Agricole.
"China activity data, especially Q3 GDP, are unlikely to bring much cheer to nervous markets."
Oil prices enjoyed some more minor gains, although they are still sitting at multi-year lows. US benchmark West Texas Intermediate for delivery in November rose 46 cents to $83.21 a barrel in mid-morning Asian trade, and Brent crude for December advanced 13 cents to $86.29.
Gold was at $1,236.02 an ounce against $1,236.20 late Friday. (AFP)
