Asian stocks rise as Fed taper fears wane

Asian markets made modest gains today as speculation eased over whether the US Federal Reserve will begin an early tapering of its massive stimulus programme.
Emerging-market currencies suffered a torrid few days of trading last week as dealers bet on an end to the Fed's USD 85-billion-a-month monetary easing.
But figures showing a slump in US housing market sales on Friday allayed fears of an early stimulus rollback and led to rallies in Europe and the US.
The feel-good factor carried on into the start of the new week's trade in Asia, with Sydney closing up 0.23 per cent, or 12.0 points, at 5,135.4 and Seoul gaining 0.95 per cent, or 17.70 points, to 1,887.86.

In Shanghai, Chinese shares jumped 1.90 per cent, or 39.01 points, to 2,096.47 boosted by gains in financial stocks and enthusiasm for plans approved last week to create a free-trade zone in the city. Hong Kong closed 0.65 per cent, or 141.81 points, higher at 22,005.32.
Tokyo stocks opened 0.43 per cent higher but ended down 0.18 per cent, or 24.27 points, at 13,636.28. Dealers said the early gains were eroded by profit-taking.

In emerging markets, where currencies tumbled last week over concerns that the stimulus-inspired investment splurges in their regions would end, trade was broadly positive.
Jakarta was flat in the early afternoon while Kuala Lumpur was up 0.63 per cent. Mumbai was up 0.31 per cent by lunch.

There was some much-needed respite for emerging-market currencies. The Indian rupee, which tumbled to a record low of 65.56 to the dollar last week, fetched 64.16 to the dollar in Tokyo afternoon trade against 64.45 Friday afternoon.
The Indonesian rupiah edged up to 10,770 from 10,963.
In India, however, analysts said tough times were still ahead for the ailing national currency. "The rupee is still in a bearish phase and the demand for dollars is not down," said Param Sarma, chief executive with NSP Forex.
Expectations of an end to the US stimulus programme have seen foreigners in recent months repatriate some of the vast sums that have poured into emerging economies. The pullout has hit currencies and equities.

The dollar was largely unchanged against major currencies. It was at 98.60 yen in Tokyo afternoon trade, while the euro bought USD 1.3382 and 131.91 yen.
The market rises in Asia echoed modest gains on Wall Street and in Europe at the end of last week. He Dow Jones Industrial Average rose 0.31 per cent, while London closed 0.70 per cent higher. Frankfurt added 0.23 per cent and Paris rose 0.25 per cent.
The positive trading was also helped by upbeat manufacturing data from Europe, the US and China. But analysts warned that the lack of economic pointers, apart from ongoing speculation over what the Fed might do, would make trade unpredictable in the coming days.