Broad gains for most markets earlier came as after comments from New York Federal Reserve President William Dudley and St. Louis Fed President James Bullard were interpreted as suggesting the central bank wasn't about to taper off its bond-purchase program.
Meanwhile buying was further supported by outcome of the Bank of Japan two-day policy board meeting, where the officials voted unanimously to keep its monetary policy unchanged. The BOJ raised its assessment of the economy for the fifth consecutive month and said in a statement that the economy has started picking up.
The Bank of Japan said it will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen. With regard to the asset purchases, the Bank will continue with purchase Japanese government bonds (JGBs) so that their amount outstanding will increase at an annual pace of about 50 trillion yen, and that the average remaining maturity of the Bank's JGB purchases will be about seven years. The Bank will purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual pace of about 1 trillion yen and about 30 billion yen respectively. As for CP and corporate bonds, the Bank will continue with those asset purchases until their amounts outstanding reach 2.2 trillion yen and 3.2 trillion yen respectively by end-2013; thereafter, it will maintain those amounts outstanding.
Investors are now awaiting for the Fed Chairman Ben Bernanke's testimony to the Joint Economic Committee of the U.S. Congress, which will take place later in the global day, for scrutinizing further clues over the direction of U.S. monetary policy. The Fed's $85 billion-per-month bond buying program has played a significant role in the market's rally and investors have recently become nervous over when the central bank will alter or halt the program.
In the Asia Pacific market, the Japanese market outperformed the region, with the Nikkei Stock Average rising 1.2% to 15,573..77, its highest level since December 27, 2007 at 15,564.90.
Japanese exporters shares advanced today, led by Olympus Corp. that rose 8.5% at 3,455 yen on media reports that company would make up for sluggish digital camera operations by boosting sales of medical equipment in emerging markets. Sony Corp shares added 5.9% at 2,290 yen on reports the company is considering evaluating a proposal from major shareholder Third Point LLC, to spin off part of its movie and music business. Domestic demand-related stocks rose after the BOJ's brighter assessment of the economy. General contractors Kajima Corp gained 2% to 364 yen and Hazama Ando Corp 4.7% to 246 yen.
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The Australian market closed lower after erasing early gains, as investors chose to book profit after a poor reading of consumer confidence, and on cautious ahead of the US Federal Reserve Chairman Ben Bernanke testimony later in the global day. The ASX200 index dropped 0.28% to 5165.40, while the broader All Ordinaries index shed 0.27% to 5142.10. Shares in gold miners declined massively in Sydney due to plunge in precious metal prices, while financials, realty, and realty shares also fell notably. Whilst on the positive side, shares materials and resources, energy, and utilities companies were major gainers.
Australian consumer sentiment fell for second straight month, denting hopes that households may lead a recovery in weaker parts of the economy such as retail sales as a decade long mining boom slows. The Westpac-Melbourne Institute index of consumer sentiment fell by 7% to 97.6 in May from 104.9 in April to its lowest level since August 2012. Over the last two months, the index has fallen 11.7%, reversing gains made earlier in the year. A reading below 100 indicates pessimists outnumber optimists.
The China market finished the session slight lower, registering first fall in six consecutive days, as profit taking among the blue chips, led by technology, utility and small-cap shares, on cautious about the release of a preliminary manufacturing index tomorrow. The benchmark Shanghai Composite index fell down 0.12% at 2302.40. The benchmark index climbed 5.8% since May 2 on speculation the government is accelerating economic reforms after the government said investment projects for airports and gas fields won't need pre-approval any more.
Chinese utilities companies stocks dropped after Citigroup Inc. said China may cut the on-grid tariff for coal-fired power plants, while shares of homebuilders and building materials producers rallied on ongoing economic recovery and abundant liquidity and after Deutsche Bank AG said earnings of the largest developers are stable.
The Hong Kong stocks finished the shortened session lower, with the benchmark Hang Seng Index down by 0.45% to 23,261.08. Decline in the bourses were mostly due to weak showing of A-shares in the Mainland and ahead of the testimony from Federal Reserve chairman Ben Bernanke on the US economic outlook later today. City bourses commenced today's trading in afternoon as rainstorm in Hong Kong led to the cancellation of the morning session. China Mobile fell 0.8% to HK$84.8. HSBC edged down 0.2% to HK$89.4 after going ex-dividend today. Shares of Chinese power producers fell, with China Resources Power falling 4.5% to HK$20.15 on a possible restriction on coal imports. Huadian Power plunged 8.7%to HK$3.77. Huaneng Power slid 8.3% to HK$7.94. Datang fell 4.7% to HK$3.41. China Power retreated 7.3% to HK$2.94.
Indian share market closed lower after erasing early gains late afternoon, hit by profit taking pressure on oil & gas stocks, with the Sensex down by 0.25% to 20,062.24. Shares of the state-owned oil marketing companies declined on concerns of implementation of fuel pricing mechanism. Under the new policy, the finance ministry has proposed shifting the pricing of petrol and diesel from the current trade parity basis to export parity basis, which would help in excluding extra costs like freight and various taxes and duties. According to reports, the fuel retailers are opposing switch to export parity pricing. The oil marketing companies fear a loss of Rs 18,000 crore if the pricing policy is changed. Private refiners are likely to take a hit of Rs 4,200 crore in sales, report added.
Elsewhere, Indonesia's JKSE rose 0.37%, Malaysia's KLSE added 0.38%, New Zealand's NZX50 jumped 0.42%, Singapore's STI advanced 0.3%, South Korea's KOSPI rose 0.64%, and Taiwan's Taiex added 0.19%.
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