Appetite for riskier equities continued for second day in row on calming jitters about imminent tapering of quantitative easing program (bond-buying program) in the world largest economy after U.S. Federal Reserve chair nominee Janet Yellen suggested the central bank would not start reeling in its easy-money policy in the immediate future as economic growth remained tepid and unemployment still too high.
Federal Reserve Vice Chairwoman Janet Yellen signalled on Thursday that there would be no big changes to the central bank if she becomes its next chief. In the Senate Banking Committee's hearing on her nomination to become the Fed's first chairwoman, Janet Yellen told that while stimulus measures cannot continue forever, policy would support economic growth and jobs. Ms. Yellen deftly fielded questions on diverse topics, including the central bank's controversial bond-buying program, bank regulation, asset bubbles and even gold prices. She defended the policies adopted during Fed Chairman Ben Bernanke's tenure, indicating she would continue along a similar path.
Meanwhile, buying spree also aided by optimism about wide ranging economic reforms in China after report published Friday in Communist Party newspaper the People's Daily, which, citing a senior government official, said that China's reform will be unprecedented.
Yang Weimin, deputy director at the Office of the Central Leading Group on Finance and Economic Affairs told the People's Daily in an interview that China's reforms will involve 15 sectors and 60 specific tasks. Though Mr. Yang didn't elaborate, a document containing much more substantive details of what was actually decided at the Third Plenum is being circulated on the Internet.
Among Asian bourses, shares on the Japanese financial market made it two days of gains in a row, with the benchmark Nikkei225 index rising 289.51 points to finish at 15165.92. The Nikkei gained 7.7% or more than 1,000 points over the week.
The Japanese currency weakened against the greenback after Federal Reserve Vice Chairwoman Janet Yellen said that there are dangers to ending the central bank's $85 billion-a-month bond-buying program too early. The greenback was trading at 100.16 yen, compared with 100.01 yen late Thursday in New York.
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Shares of Tokyo lenders were up, with Mitsubishi UFJ Financial Group adding 2% to 658 yen and Mizuho Financial Group adding 1.9% to 218 yen after raising their full-year profit guidance for the 2013 fiscal year.
Japan's five major banking groups received a big boost from soaring stock prices and a resurgent economy, seeing their collective net profit grow 60% in the April-September period to some 1.65 trillion yen ($16.44 billion), the highest level for an interim in seven years.
In Australia, shares of the Australian financial market finished higher for second consecutive day, with the benchmark S&P/ASX 200 index rising 0.86% to 5401.70, on the top of 0.68% gains prior day. For the week, the ASX200 inched up 0.2%.
Australian top four banks raised, with Commonwealth Bank gaining 0.8% to A$77.79, Westpac Banking Corp 1.1% at A$33, Australia & New Zealand Banking Group 1.4% to A$32.28 and National Australia Bank 1.5% to A$34.30.
Australian materials and resources were also higher, with Australia's second biggest miner, Rio Tinto adding 0.6% to A$65.51 while the larger BHP Billiton rose 0.2% to A$37.89. Fortescue Metals was up 0.3% to A$5.84. Among gold miners, Newcrest Mining rising 0.5% to A$9.60, Perseus Mining 2.6% to A$0.39 and Kingsgate Consolidated 1.1% to A$1.39.
GrainCorp shares fell 4.02% to A$11.70 after a media report said Prime Minister Tony Abbott will reject the A$3.0 billion takeover by Archer Daniels Midland Co. A spokesman for Treasurer Joe Hockey, however, said his office alone can rule on the GrainCorp takeover. "The Prime Minister does not have the power to veto the decision (on GrainCorp)," said Tony Ritchie, a spokesman for the Treasurer. GrainCorp, in a filing to ASX, noted the media speculation but said it was not aware of any material information that has not been previously been disclosed to the market.
In China, Chinese stock market advanced for second consecutive day, on optimism about wide ranging economic reforms with companies closely connected to reforms such as the Shanghai free-trade zone leading the gains. The Shanghai Composite added 1.7% to 2,135.83 while the CSI 300 Index jumped 2% to 2350.73.
Shares of Chinese companies that were highly connected to economic reforms such as the Shanghai free-trade zone were sharp higher on expectations of unprecedented wide-ranging economic reforms. Media company Shanghai Oriental Pearl jumped 7.9% to 9.58 yuan and Shanghai Jin Jiang International Industrial rose 6.9% to 10.38 yuan. Anhui Huilong Agricultural gained 6.3% to 11.68 yuan and Guangxi Fenglin Wood rose 6.8% to 8.60 yuan.
Shares of military equipment makers in China were also higher on expectations of higher government spending over the next decade. Shaanxi Aerospace Power Hi-Tech closed 10% upper limit at 13.42 yuan and Beijing Aerospace Changfeng also closed 10% upper circuit at 13.75 yuan.
In Hong Kong, HK shares closed sharply higher after Fed's vice chairman Janet Yellen made it clear that QE policy will stay until strong recovery is seen. Meanwhile, buying spree also aided on hopes of detailed announcement from the China's third Plenum.
Among the HK 50 blue chips, 48 stocks rose and two fell. China Merchants Holdings (International) Co was top blue-chip winner, raising 5% to HK$28.45. China Resources Enterprise fell 0.6% to HK$26.85, becoming the top blue-chip loser. Among market heavyweight, HSBC Holdings inched up 0.6% to HK$85.6, while China Mobile put on 1% to HK$81. China financial players rose across the board. Minsheng Bank (01988) and CM Bank (03968) gained 3.8% and 3.5% to HK$8.73 and HK$15.32. ABC (01288) added 3.3% to HK$3.77.
Elsewhere in the region, Indonesia's Jakarta Composite index fell 0.73%. South Korea's KOSPI rose 1.94%. Taiwan's Taiex index jumped 0.52%. Malaysia's KLSE Composite added 0.32%. Singapore's Straits Times index rose 0.32%. New Zealand and Indian market closed for public holiday.
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