By V. Phani Kumar, Colin Ng and Wei-Zhe Tan
HONG KONG (MarketWatch) -- Asian markets ended higher Thursday after the U.S. Federal Reserve indicated the worst was over for the U.S. economy, with resource stocks especially strong on higher metal and crude-oil prices.
Indian stocks rallied as investor sentiment remained high after an unexpectedly strong industrial output in June.
Japanese, Chinese and Hong Kong stocks ended higher, but put on less than they lost Wednesday, with some analysts unsure the day's advance could be sustained.
"It seems to me that the market still needs time to come to the right conclusion," said Linus Yip, strategist at First Shanghai Securities.
Although some people think the U.S. economy is stabilizing, "what makes the market nervous is that it's already risen to high levels and there is still a chance for the Fed to change its monetary policy," he said. That could result in higher interest rates and a slower recovery.
Japan's Nikkei Stock Average of 225 companies gained 0.8% to 10,517.19, China's Shanghai Composite rose 0.9% a day after it slumped 4.7%, and Hong Kong's Hang Seng Index advanced 2.1%, less than Wednesday's 3% decline.
India's Sensex rose 2.2% to 15,347.63 in the afternoon, still cheering the 7.8% jump in June industrial output from the year-earlier month reported Wednesday.
Australia's S&P/ASX 200 ended up 2.1%, New Zealand's NZX 50 added 1.6%, South Korea's Kospi slipped 0.1% and Taiwan's Taiex rose 2%. Singapore's Straits Times was recently up 1.9%, with Indonesia's main index 2.1% higher, Thailand's SET Index gaining 1.3% and Philippine shares rising 1%.
UBS analysts noted in a report that Asian markets, excluding Japan, had outperformed the MSCI World index by 37% in the last six months. But they added that although regional fundamentals still looked good, "from a liquidity perspective, a period where Asia performs relatively less well compared to the rest of the world would seem plausible."
U.S. futures were pointing toward another higher opening after Wednesday's gains on Wall Street, with Dow Jones Industrial Average futures up 57 points in screen trade recently.
Commodity plays powered ahead across the region on higher London Metal Exchange base metal prices and anticipation of higher oil prices. Yunnan Copper jumped by the daily limit of 10% in Shenzhen, with Jiangxi Copper /zigman2/quotes/201668148/delayed HK:358 -2.32% /zigman2/quotes/204256025/composite JIXAY +11.20% up 8.6% in Shanghai and 3.9% in Hong Kong. Pacific Metals /zigman2/quotes/209253802/delayed JP:5541 -2.36% rose 4.1% in Tokyo, Santos /zigman2/quotes/207349564/delayed AU:STO +1.00% was up 3.3% and Alumina /zigman2/quotes/210515632/delayed AU:AWC +0.98% gained 3.1% in Sydney, while in Mumbai trading, Tata Steel and Hindalco Industries were both up 3.1%.
The Tokyo stock market was lifted as auto stocks bounced off their declines Wednesday. Toyota Motor /zigman2/quotes/200537742/composite TM -0.32% /zigman2/quotes/203803129/delayed JP:7203 +1.38% was up 1.5% and Honda Motor Co. /zigman2/quotes/207173990/composite HMC -0.65% /zigman2/quotes/200490352/delayed JP:7267 +2.13% gained 1.3%.
Commonwealth Bank of Australia /zigman2/quotes/200638713/delayed AU:CBA +0.31% /zigman2/quotes/207018701/composite CBAUF +1.11% was a major contributor to the market's strength in Sydney, as the stock rose 4.9%, courtesy of broker upgrades after its better-than-expected results Wednesday.
Telstra /zigman2/quotes/201936124/delayed AU:TLS +0.71% /zigman2/quotes/209181685/composite TLSYY -0.07% fell 1.4% although its full year profits rose 10.3%, beating expectations. The quality of the results was slightly weaker than expected, said Macquarie, with growth driven by cost cutting, offsetting disappointing sales revenue growth of 2.9% compared with the 3.4% Macquarie expected.
"The rally we've seen in markets is well beyond the worst being over -- the market is now pricing recovery," said First NZ Capital broker James Lee.
In Wellington, Fletcher Building /zigman2/quotes/200215142/delayed NZ:FBU 0.00% was up 4.2%, Air New Zealand /zigman2/quotes/200916351/delayed NZ:AIR -0.33% rose 1.7% and Nuplex Industries gained 6.5%.
In Hong Kong, shares of Cheung Kong (Holdings) /zigman2/quotes/208405501/delayed HK:1 +1.00% and Hutchison Whampoa /zigman2/quotes/203034716/delayed HK:13 -2.26% advanced 2% and 2.3%, respectively, after the conglomerates controlled by tycoon Li Ka-shing reported better-than-expected first-half results.
In Seoul, Ssangyong Motor jumped 14.9%, stretching the number of sessions it has risen by the daily permissible limit of around 15% to six, after creditor Korea Development Bank said it would provide capital to help Ssangyong normalize its operations.
In the foreign exchange markets, the U.S. dollar was buying ¥96.35 from ¥96.19 in late New York trade. The euro was at $1.4253, from $1.4196 and at ¥137.38, from ¥136.63.
Spot gold was at $952.10 per troy ounce, rising $4.90 from the New York close. Barclays Capital said gold was trending higher, but remained in the middle of a large range. "In the bigger picture, we regard the contracting range of the past six months as constructive for an eventual move through $981 toward the $1,033 peak and beyond, to new all-time highs."
September Nymex crude-oil futures were up 80 cents at $70.96 per barrel on Globex.