Investment sentiments turned bullish across the Asian market on tracking cues from record high finish of Wall Street overnight and on dovish commentary from incoming US Federal Reserve Chair Janet Yellen that reinforcing view the current US economic stimulus plan would continue until the US Central Bank is satisfied with unemployment and inflation levels.
Janet Yellen said the US economy has regained ground lost to the deepest recession since the 1930s. But she said unemployment remains too high at 7.3% and notes that the Fed is still trying to accelerate the economy's recovery. In testimony prepared for her confirmation hearing Thursday, Yellen said the economy is still performing far below its potential. And she points out that inflation is running below the Fed's 2% target. For these reasons, the Federal Reserve is using its monetary policy tools to promote a more robust recovery, Yellen said in her testimony. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.
Among Asian bourses, Japanese financial market rallied sharply, buoying the benchmark Nikkei225 index higher by 309.25 points to 14876.41, boosted by yen depreciation against the US dollar and as dovish commentary from incoming US Federal Reserve Chair Janet Yellen.
Heavily weighted and indexed shares enjoyed the most bidding in Tokyo due to the fervent futures market. Fast Retailing surged 5.2% to 34,250 yen, while Fanuc added 3.2% to 16,510 yen and KDDI gained 5.3% to 6,160 yen. Exporters also benefited generally from the weaker yen, with Kyocera adding 2.3% to 5,110 yen and Tokyo Electron up 2.4% to 5,620 yen.
The Cabinet Office released Preliminary GDP for the July-September quarter showing Japan's real GDP grew at 0.5% QoQ or 1.9% YoY in July-September quarter, backed by high public investment as part of the government's economic stimulus package and strong demand for housing construction ahead of the sales tax hike next April. But the pace of growth decelerated from an unrevised 0.9% rise (annualized +3.8%) in the second quarter of 2013 due to a slump in exports to the U.S. and China and slower consumer spending. The Cabinet Office's export volume index fell a seasonally adjusted 2.4% in July-September from the previous quarter, when it rose 2.8%. Net exports - exports minus imports - pushed down Q3 GDP by 0.5 percentage point, the first negative contribution in three quarters. Personal consumption, which accounts for about 55% of GDP, rose only 0.1% on quarter in Q3, as expected, decelerating from +0.6% (revised from +0.7%) in Q2. Business investment posted the second straight quarterly gain in Q3 but the pace of increase decelerated to +0.2% q/q from +1.1% (revised from +1.3) in Q2.
In Australia, the Australian financial market climbed up, sending the benchmark S&P/ASX 200 index higher by 36.20 points to 5355.40.
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Ten Network shares jumped 4% to A$0.26 after announcing management have been instructed to slash costs by 10% with jobs losses expected.
In China, Chinese shares rebounded on bottom fishing following steep losses prior day. The Shanghai Composite bounced 0.6% to 2,100.51, after suffering a loss of 1.8% yesterday, the most in seven weeks, after a top-level Communist Party meeting disappointed investors looking for details on policy shifts.
Shares of Chinese healthcare and consumer discretionary companies rose the most in Shanghai market, with Shanghai Fosun Pharmaceutical rose 6.2% to 18.53 yuan. Sichuan Kelun Pharmaceutical Co. added 2.7% to 42.76 yuan. Sichuan Changhong jumped 7% to 3.04 yuan. Hisense Electric Co, China's biggest manufacturer of flat-panel televisions, added 1.3% to 11.60 yuan.
In Hong Kong, HK shares finished higher, with benchmark Hang Seng Index raising 0.82% to 22649.15 while the Hang Seng China Enterprises Index rose 1.1% to 10391.13, following the strong rally of the Dow on comments of Fed's vice chairman Janet Yellen, which alleviated worries of tapering.
Among the HK 50 blue chips, 37 stocks rose and 8 fell, with 5 stocks remaining steady. Tencent added 4.6% to HK$410.8, while China Resources gained 4.2% to HK$27, making themselves the top blue-chip winners. HSBC Holdings inched up 0.4% to HK$85.1, while China Mobile was up 0.7% to HK$80.15. Elsewhere, Weigao soared 29.8% to HK$8.98 after reporting 28% growth in 3Q earnings.
The volume of Hong Kong's re-exports of goods decreased marginally in September by 0.1% over a year earlier, while that of domestic exports decreased by 19.3%. Taken together, the volume of total exports and import of goods fell 0.4% and rose 0.5%, data from the Census and Statistics Department showed. Comparing the first nine months of 2013 with the same period in 2012, the volume of Hong Kong's re-exports of goods rose 3%, whereas that of domestic exports dropped 9.5%. Taken together, the volume of total exports and imports of goods rose 2.8% and 3.9%.
In India, Indian benchmark indices finished higher as firmness in European and Asian stocks boosted sentiment. Reserve Bank of India (RBI) governor, Raghuram Rajan, expressed comfort on Wednesday about core inflation and highlighted the narrowing current account deficit in his efforts to boost sentiments after recent sell off in financial markets. However, market gave up strong gains witnessed in early deals after the latest data showed that the wholesale inflation quickened in October. The S&P BSE Sensex was provisionally up 198.45 points or 0.98%, off close to 175 points from the day's high and up about 45 points from the day's low.
Among Indian blue chip stocks, Cipla dropped on weak Q2 result. Coal India declined on weak Q2 result. Tata Steel surged after the company reported strong Q2 result. Tata Motors jumped after the company reported its global wholesales for October 2013. Sun Pharmaceutical Industries declined after the company reported Q2 results. Tata Power Company rose after the company reported a reverse turnaround in Q2 September 2013. PTC India jumped on good Q2 result.
Elsewhere in the region, New Zealand's NZX 50 index rose 0.17%. Indonesia's Jakarta Composite index rose 1.52%. South Korea's KOSPI rose 0.2%. Taiwan's Taiex index jumped 0.4%. Malaysia's KLSE Composite added 0.1%. Singapore's Straits Times index rose 0.77%.
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