HONG KONG (MarketWatch) — Japanese shares finished at their highest level in more than a year to lead a broad rally in Asia Tuesday after Federal Reserve Chairman Ben Bernanke signaled U.S. interest rates may remain at the current ultra-low levels.
Spurred by strong overnight gains on Wall Street and a weaker yen, the Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -3.67% ended at 10,255.15, jumping 2.4% from the previous day’s close for its biggest percentage gain in more than five months.
Elsewhere, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -2.42% gained 1.8% to 21,046.91, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -3.30% climbed 1% to 2,039.76, Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -3.25% added 0.9% to 4,301.30 and Taiwan’s Taiex advanced 0.8% to 8,029.46.
Diverging from the regional trend, China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -4.04% fell 0.2% to 2,347.18. Data released Tuesday by China’s National Bureau of Statistics showed the nation’s largest industrial groups saw their net income drop 5.2% in the first two months of the year from the year-earlier period.
Bernanke remarks, German data boost U.S. stocks
Stocks rise after Federal Reserve Chairman Ben Bernanke signals more easy monetary policy and positive German business confidence data cheers Europe. (Photo: AP/Seth Wenig)
Bernanke’s comments were “an elixir” for investors grappling with uncertainty over the state of the global economy, said Stewart Hall, a senior currency strategist at RBC Capital Markets.
“Arguing that a good deal of the success in terms of jobs growth was a function of declining layoffs, rather than increased hiring, helped to keep alive quantitative-easing sentiment, as well as ensuring that the Fed would keep a heavy foot on the monetary accelerator,” Hall said.
Still, the boost for markets may be short-lived, with Credit Agricole strategist Mitul Kotecha noting that while Bernanke maintained that accommodative monetary policy is still required, he didn’t hint at more quantitative easing. That omission means that “market optimism may be tempered in the days ahead,” Kotecha said.
Metal futures climbed in New York on Monday after the dollar softened on Bernanke’s remarks, in turn lifting metal-related stocks a boost in Asia on Tuesday. Read more on metals.
Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM -8.04% /zigman2/quotes/206026738/delayed NCMGF -9.60% rose 1.5% and BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -4.52% /zigman2/quotes/208108397/composite BHP -3.58% climbed 0.7% in Sydney, Nippon Light Metal Co. advanced 3% in Tokyo and Korea Zinc Co. soared 5.5% in Seoul.
Aluminum Corp. of China Ltd., or Chalco, /zigman2/quotes/202960704/delayed HK:2600 -2.36% /zigman2/quotes/208051344/composite ACH +1.67% /zigman2/quotes/210453246/delayed CN:601600 -2.86% rose 4.1% and Jiangxi Copper Co. /zigman2/quotes/201668148/delayed HK:358 -2.14% /zigman2/quotes/204256025/delayed JIXAY -8.05% /zigman2/quotes/201334192/delayed CN:600362 -4.80% gained 3.8% in Hong Kong; in Shanghai, Jiangxi Copper rose 1% and Zhongjin Gold Corp. /zigman2/quotes/207741711/delayed CN:600489 -5.37% climbed 2%.
Shares of Sumitomo Metal Mining Co. /zigman2/quotes/205273301/delayed JP:5713 -3.10% /zigman2/quotes/203832662/delayed STMNF -4.36% spiked 5.9% in Tokyo on news the Pogo gold mine in Alaska, of which it owns 85%, has found a gold deposit estimated at 40 metric tons. See report on Sumitomo Metal Mining gold strike.
The yen’s weakness after Fed Chairman Bernanke’s remarks supported many major Japanese exporters; Toyota Motor Corp. /zigman2/quotes/203803129/delayed JP:7203 -3.48% /zigman2/quotes/200537742/composite TM -0.49% climbed 3.6% and Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -3.87% /zigman2/quotes/208567357/composite SNE +2.15% added 3.1%.
Honda Motor Co. /zigman2/quotes/200490352/delayed JP:7267 -4.26% /zigman2/quotes/207173990/composite HMC -1.00% gained 3.5% after a Nikkei report that the car maker would build a new Thailand plant that was less likely to be affected by floods than its existing facility, which had to shut down for a part of last year due to flooding. Read more on Honda’s reported plans for new Thai factory.
Regional financials took back some ground lost in the previous session, with Japan’s Nomura Holdings Inc. /zigman2/quotes/206251373/delayed JP:8604 -5.09% /zigman2/quotes/207276383/composite NMR -1.34% jumping 4.1% after four straight days of losses.
Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC -2.84% /zigman2/quotes/210300378/delayed WEBNF +0.48% climbed 1.4% in Sydney, and Cathay Financial Holding Co. rose 1.2% in Taipei. Heavyweight HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -2.30% climbed 2.3% in Hong Kong, while China Construction Bank Corp. /zigman2/quotes/207732534/delayed CICHY +0.22% /zigman2/quotes/208058581/delayed CN:601939 -2.55% /zigman2/quotes/208974133/delayed HK:939 -2.17% rose 2.5% in Hong Kong and 0.9% in Shanghai.
China Life Insurance Co. /zigman2/quotes/202359856/delayed HK:2628 -2.35% /zigman2/quotes/206573290/composite LFC +1.37% /zigman2/quotes/204766889/delayed CN:601628 -4.69% climbed 2.7% in Hong Kong and 0.9% in Shanghai, unaffected by a 45% drop in 2011 profit that the insurer had previously warned about.
Deutsche Bank analysts said that the firm’s capital position was “comfortable” and that the stock’s valuation was relatively undemanding. See report on China Life earnings.