HONG KONG (MarketWatch) — Asian shares mostly advanced Tuesday, snapping out of a series of recent declines and reversing some of Monday’s steep losses, amid hopes that policy makers would step in to stem growing concerns about the global economy.
South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -3.30% climbed 1.1%, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -3.67% advanced 1% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -2.93% climbed 0.4%. Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -3.25% ranked among the day’s best performers, rallying 1.5%. Each of the four benchmarks ended a four-session losing streak.
The gains in Sydney came after the Reserve Bank of Australia cut its key cash rate by a quarter percentage point to 3.5%, citing modest domestic economic growth and an more uncertain international environment. Read more on Australian rate cut.
“This cut was almost solely driven by the recent deterioration in global growth/credit conditions. This suggests that further cuts are likely,” said Su-Lin Ong, strategist at RBC Capital Markets.
With rates this low, who needs QE3?
The idea of the Federal Reserve instituting a new round of quantitative easing (referred by many as 'QE3') may be unnecessary with interest rates currently so low.
Elsewhere in the region, China’s Shanghai Composite index /zigman2/quotes/206600939/delayed CN:000001 -4.24% ended 0.2% and Taiwan’s Taiex climbed 1.5%.
The broad gains came amid optimism that European policy makers would act to help ease the region’s debt problems, amid news that finance ministers and central-bank governors from the Group of Seven major economies will hold an emergency conference call later Tuesday to discuss the euro-zone crisis.
Strategists at BNP Paribas said that “any hint of coordinated action to deal with Europe will keep risk supported.” See report on Europe and the G-7 conference.
Meanwhile, Olli Rehn, the European Commission chief for economic and monetary affairs, reportedly said officials have considered the idea of directly recapitalizing euro-zone banks, and that discussions were moving forward on creating a banking union. Read more on European market action.
Exporters were among the many beaten-down Asian stocks that rebounded during the session.
Tokyo-listed electronics and technology firms traded higher as well, with Fujitsu Ltd. /zigman2/quotes/208459594/delayed JP:6702 -5.48% /zigman2/quotes/208783738/delayed FJTSY -3.45% jumped 5.5%, and Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -3.87% /zigman2/quotes/208567357/composite SNE -4.77% rose 3.3%.
Canon Inc. /zigman2/quotes/207639533/delayed JP:7751 -2.15% /zigman2/quotes/202555523/delayed CAJFF +3.51% climbed 3.4% after the firm said that it would buy back up to 50 billion yen ($640 million) of its outstanding shares.
In South Korea, LG Electronics Inc. /zigman2/quotes/209966407/delayed KR:066570 -3.21% climbed 4.7% and Samsung Electronics Co. /zigman2/quotes/202367843/delayed SSNLF 0.00% gained 0.6% in Seoul, while Asustek Computer Inc. rose 3.6% and Nanya Technology Corp. climbed 6.8% in Taipei.
Some energy stocks also bounced back as Nymex crude-oil futures moved toward $85 a barrel in electronic trading.
Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL -3.46% /zigman2/quotes/206770672/delayed WOPEF -11.71% rose 3.8% and Beach Energy Ltd. /zigman2/quotes/200513631/delayed AU:BPT -5.90% /zigman2/quotes/206671354/delayed BEPTF -3.19% soared 10.1% in Sydney, and Inpex Corp. /zigman2/quotes/206689846/delayed JP:1605 -2.67% /zigman2/quotes/207958170/delayed IPXHY -2.48% added 2.5% in Tokyo.
Shares of Wharf Holdings Ltd. /zigman2/quotes/202854264/delayed HK:4 -17.16% /zigman2/quotes/209480994/delayed WARFF -11.86% jumped 1.5% on news that the diversified conglomerate had accepted the Hong Kong government’s terms for renewal of a lease on a container terminal. Read more on Wharf’s lease terms.
Ranking among decliners, shares of Fast Retailing Co. /zigman2/quotes/200663563/delayed JP:9983 -2.84% /zigman2/quotes/208569095/delayed FRCOF -2.74% tumbled 8.8% in Tokyo after the firm reported that domestic same-store sales for its Uniqlo casual-clothes chain fell 10.3% compared to the year-ago period.
Qantas Airways Ltd. /zigman2/quotes/205534063/delayed AU:QAN -1.95% /zigman2/quotes/200387630/delayed QUBSF +0.26% fell to an all-time low of 1.15 Australian dollars ($1.13) before recovering a cent to finish at A$1.16, down 18.7% from the previous day’s close. The slump came after the airline warned its annual pre-tax underlying profit could fall as much as 90% amid weakness at its international division. See report on Qantas profit warning.