Asian stocks rose to their highest since May 2008 on Wednesday, led by sectors most sensitive to the economic growth cycle ahead of U.S. earnings.
Better than expected results from Apple Inc.and International Business Machines (IBM) bolstered sentiment and helped pull Asia’s technology shares higher, while a weak greenback caused the commodity shares to rally. However, market players continued to remain wary about China's fight against inflation, Hong Kong media reported that Chinese consumer prices rose 4.6% in the year to December, a slowdown from a 5.1% pace in November that would alleviate the need for aggressive monetary tightening. The Shanghai Composite Index rose 1.9 percent, at 2,859, while Hong Kong's Hang Seng index gained 1.1 percent, 24,420 as investors shrugged of concerns of monetary tightening in China, however inflation data due this week may bring back those worries.
Japan’s Nikkei Stock rose 0.4%, at 10,557; South Korea’s Seoul Composite edged 0.9% higher, to 2,116. And Taiwan’s Taiwan Weighted added 0.7%, at 9,086. Singapore’s Strait Times bucked the trend and ended lower by 0.2%, at 3,242. The MSCI index of Asia and Pacific shares excluding Japan rose more than 1%, helped by sectors such as technology, energy and raw materials. Its tech sub-index was up 1.4%, while the materials component rose nearly 1.5%.
Among the other triggers that might determine market movement going forward, is Goldman Sachs results. The Wall Street bank is expected to post fourth quarter results later today. Goldman Sachs Group Inc reports its earnings later in the day, with analysts expecting quarterly profit to have fallen by roughly half, hit by the same adverse fixed income trading environment that slammed Citigroup Inc's results a day earlier.
European markets retreated after opening in the green. The French CAC 40 dropped 0.2% to 4,006, and the Germany’s DAX was trading flat at 7,120. UK’s FTSE was also trading marginally lower, down 0.1% at 6,051,