By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Japanese and South Korean stocks jumped Thursday on hopes the Federal Reserve will maintain its bond purchases for longer, while mainland Chinese shares continued to drop amid worries over policy outlook.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.35% ended 3% higher and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.14% rose 2.9%, while Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.24% gained 1.7%.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.49% climbed 0.5%, rising for a third straight day.
/zigman2/quotes/210598065/realtime DJIA 34,347.03, +152.97, +0.45%
The advances followed an upbeat finish on Wall Street overnight after U.S. first-quarter GDP growth was revised down to 1.8%, from an earlier estimate of 2.4%.
“The concerns of the market that prompted a selloff in recent weeks appear to have subsided,” said CMC Markets sales trader Miguel Audencial.
“The first-quarter U.S. gross domestic product figures increased [by less] than forecast, which the market read as a signal that the U.S. Fed is likely to step on the brakes at a later date than previously feared,” Audencial said.
However, China’s Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.40% ended 0.1% lower for its 16th drop in 18 trading days.
The benchmark had risen more than 1% earlier in the day after official data showing profits at Chinese industrial firms rose more than 15% from a year-earlier in May. But the index let those gains slip by amid festering worries over high borrowing costs in the Shanghai interbank money markets and concerns about a slowing economy.
The Next 24: Will Fed soothe markets?
Bed Bath & Beyond nears 52-week highs as it releases earnings. European stocks look to extend rally. Fed officials hope to soothe markets.
While banks were broadly higher, coal miners and brokerages declined, with Citic Securities Co. /zigman2/quotes/210326178/delayed CN:600030 +1.31% /zigman2/quotes/207216844/composite CIIHF -1.04% losing 1.5% and China Shenhua Energy Co. /zigman2/quotes/202621923/delayed CN:601088 +2.89% /zigman2/quotes/206839995/composite CSUAY +2.86% dropping 1.9%.
In Hong Kong, meanwhile, shares of Industrial & Commercial Bank of China Ltd. /zigman2/quotes/201401473/delayed HK:1398 +1.32% /zigman2/quotes/202401350/composite IDCBY +1.56% gained 1.3%, on top of Wednesday’s 6.8% surge, and footwear major Belle International Holdings Ltd. /zigman2/quotes/237872464/delayed HK:1880 -2.72% jumped 4.6%.
Meanwhile, technology shares led the strong advance in Seoul, with heavyweight Samsung Electronics Co. /zigman2/quotes/202367843/composite SSNLF -29.70% /zigman2/quotes/209800866/delayed KR:005930 -0.65% soaring 6.2% after recent losses, while LG Display Co. /zigman2/quotes/204466928/composite LPL -0.90% /zigman2/quotes/204226570/delayed KR:034220 +0.34% added 3.4%.
Data released on Thursday showed South Korea’s current-account surplus rose to a record high in May on the back of robust exports despite a global slowdown, helping to lift the market’s mood.
In Tokyo trade, the real-estate and banking sectors were higher.
Shares of Mitsui Fudosan Co. /zigman2/quotes/205394574/delayed JP:8801 +0.60% /zigman2/quotes/208297288/composite MTSFF +2.41% rallied 9.6%, and Mitsubishi Estate Co. /zigman2/quotes/208910776/delayed JP:8802 +0.08% /zigman2/quotes/204837054/composite MITEY +1.01% jumped 9.4%, while Shinsei Bank Ltd. /zigman2/quotes/210166295/delayed JP:8303 +3.16% /zigman2/quotes/209928917/composite SKLKF +0.49% and Sumitomo Mitsui Financial Group Inc. /zigman2/quotes/203656770/delayed JP:8316 -0.33% /zigman2/quotes/206471416/composite SMFG +2.23% advanced 3.9% and 3%, respectively.
In Australia, shares of in the financial and retailer sectors advanced, tracking a positive lead from Wall Street and most other regional markets.
The gains came amid major political changes, with Kevin Rudd returning as prime minister after he defeated incumbent Julia Gillard in a Labor Party leadership vote late Wednesday.
TD Securities’s Asia-Pacific Research head Annette Beacher said the market would largely shrug off the political change, as the prospect of a Labor loss in upcoming general elections was a “near certainty.”
“We believe a decisive change of government is positive for business and consumer confidence,” she said.
Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA +1.10% /zigman2/quotes/207018701/composite CBAUF +1.10% rose 2.8%, and Woolworths Ltd. /zigman2/quotes/209906204/delayed AU:WOW +0.63% /zigman2/quotes/208623225/composite WOLWF +2.19% climbed 3.1%.