By V. Phani Kumar, MarketWatch
An earlier version of the story misstated the number of days Hong Kong’s Hang Seng Index rose before the holidays. The corrected version follows.
HONG KONG (MarketWatch) — Hong Kong stocks jumped Thursday as investors returned from a long Lunar New Year-holiday to cheer the Federal Reserve’s projection of ultra-low interest rates through late 2014.
The performance in other regional markets was less enthusiastic, however, with gains in South Korea tempered by weaker-than-expected economic growth data, while Japanese shares retreated from a near three-month high as investors locked in recent gains.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.09% ended 1.6% higher at 20,439.14, completing a five-session winning streak that began ahead of the holidays.
Fed expects low rates through 2014
Fed officials say they expect short-term interest rates to stay close to zero "at least through late 2014," even longer than previously indicated.
“As the U.S. and European markets recover, investors are reentering the market and pushing up the Hang Seng Index,” said Edward Huang, a strategist at Haitong Securities in Hong Kong, citing the Fed’s interest-rate forecast. Read full story about the Fed’s decision.
Huang said the local markets were likely to rise further, citing expectations for the European debt crisis to simmer down and for China to ease its monetary policy in the near future.
Elsewhere, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% gained 0.3% to 1,957.18, while Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% fell 0.4% to 8,849.47 after a mildly positive open.
Mainland Chinese and Taiwanese markets remain closed this week for holidays, while markets in Sydney were shut for Australia Day.
“Risk-on persists. It’s bullish for Asian equities, which means confidence-sensitive capital inflows,” Tim Condon, head of Asian economic research at ING Financial Markets Research, said in a note to clients.
Condon said monetary easing in emerging markets and reduced policy uncertainty in advanced economies were behind his house’s more upbeat view for risk assets in 2012 than in 2011.
Stock gains were spread broadly in Hong Kong, with shares of trading and logistics firm Li & Fung Ltd. /zigman2/quotes/201795755/delayed HK:494 -1.41% /zigman2/quotes/201638706/delayed LFUGY -2.86% gaining 3.5% and Aluminum Corp. of China Ltd. /zigman2/quotes/202960704/delayed HK:2600 +0.44% /zigman2/quotes/208051344/composite ACH +1.23% jumping 3.3%. Property and banking names also jumped, with Sino Land Co. /zigman2/quotes/202960683/delayed HK:83 -1.47% /zigman2/quotes/206858840/delayed SNLAY -0.88% climbing 4.8% and China Life Insurance Co. /zigman2/quotes/206573290/composite LFC -0.56% /zigman2/quotes/202359856/delayed HK:2628 -1.43% advancing 4.3%.
Shares of Foxconn International Holdings Ltd. /zigman2/quotes/205017351/delayed HK:2038 0.00% /zigman2/quotes/208801946/delayed FXCNY +1.08% climbed 4.5%, bolstered by Apple Inc.’s /zigman2/quotes/202934861/composite AAPL -2.26% solid quarterly results earlier in the week. The company is a key supplier to the iPhone maker.
Heavyweight HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -0.26% under-performed, finishing 0.8% higher after fluctuating between gains and losses.
The banking giant confirmed Wednesday that it is under a U.S. Senate panel investigation in connection with money laundering, according to a Wall Street Journal report. The lender is also seeking buyers for its Japanese consumer-banking unit, Bloomberg News reported. See report on HSBC’s possible Japan unit sale.