Advances in the regional bourses came after the Federal Reserve survey (beige book) data released overnight showed that the U.S. economy grew at a modest to moderate pace in all 12 of the Fed's districts in July and August. Meanwhile, the strong auto sales data from the US also boosted confidence for US economic recovery. That data comes on top of the Institute for Supply Management's report, released on Tuesday that said U.S. factory production rose in August at the fastest pace in two years.
However, gains on the upside were limited as many investors' awiting sideline ahead of the latest policy decisions from the European Central Bank and the Bank of England. BoE had made clear that it will keep rates at record low of 0.5% until employment drops below 7% level. ECB is also widely expected to leave rates unchanged at 0.5% today. Draghi had already given his forward guidance that rates will stay at current level for an extended period of time. Today's announcement and press conference might be a non-event.
Investors were also looking ahead to Thursday, when ADP employment report and an ISM service are expected to release. Investors also awaiting for Friday, when the U.S. jobs report for August will be released.
Friday's jobs report is the last major piece of economic data the Federal Reserve will have to work with before the central bank decides whether or not to pull back on its massive bond-buying program. That program has kept interest rates abnormally low. While most investors believe the Fed will begin to pull back, the question has become when and how much.
Among Asian bourses, Japan market finished volatile but choppy trading slight higher in response to overnight gains in the Wall Street and as Bank of Japan (BOJ) raised economic view for the first time in two months and declares recovery. The Nikkei Stock Average climbed 0.08% to 14064.82 and the broader Topix added 0.13% to 1,157.84.
The Bank of Japan on Thursday formally proclaimed in a statement after a two-day meeting that the world's third-biggest economy is back on a recovery track. The tone of the language is the strongest since March 2008, when the central bank described the economy as expanding moderately. It marked an upward revision from the previous month's assessment that the economy was starting to recover moderately-a phrase the BOJ has said was a step short of declaring a full recovery. The BOJ's board decided unanimously to maintain its key policy of increasing the amount of money it supplies to the economy by Y60 trillion-Y70 trillion a year, mostly through the buying of Japanese government bonds.
However, Tokyo market trimmed intraday gains before finishing amid lingering concerns over the prospects of a US led military strike on Syria and as BOJ upgrade of economic growth assessment rekindled concerns over the government decision to go ahead with a planned sales tax hike that many fear could derail any recovery.
The declaration of a full recovery comes at a time of intense debate over whether the government should go ahead with a plan to raise the 5% consumption levy to 8% next April. Mr Abe is expected to announce his decision on the tax plan in early October.
In Australia, Australian share market finished weaker for second straight session with bullion, miners, and realty players led retreat. The S&P/ASX 200 fell 0.37% to 5,142.50, while All Ordinaries declined 0.35% to 5138.40.
Profit taking pressure dominated for second straight day in Sydney market after official data indicated country's trade balance fell into deficit in July. The Australian Bureau of Statistics said on Thursday that Australia's trade balance fell back into deficit ofA$765 million in July, following a surplus of A$243 million in June. During the July, exports were flat, while imports were up 4%.
Shares of gold miners finished steep lower in Sydney with Newcrest Mining declined 1.5% to A$13.20 and Perseus Mining was down by 4.3% to A$0.675 following a fall in bullion prices in the international market.
Banking and financial stocks declined for second day in row in reaction to Moody's downgrade of the credit ratings on subordinated debt issued by Australia's big banks including the Commonwealth Bank, Westpac, ANZ, NAB and Macquarie, amid signs regulators are toughening their stance on any future bank bail-outs. Commonwealth Bank down by 0.5% to A$72.92, Westpac Banking Corp 0.5% to A$31.47 and Australia & New Zealand Banking Group 0.6% to A$29.60, while National Australia Bank rose 0.5% to A$32.74.
Shares of civil aviation players were also weaker in Sydney after the overnight sell-off in Europe on the back of Ryanair's profit warning. Qantas was down 2.2% to A$1.33 and Air New Zealand has lost 3.2% to A$1.21. Virgin Australia Holdings in spite of the ACCC gave it's OK to Air New Zealand raising its stake in Virgin to 26%, from 23%.
In China, Key benchmark indices on the Chinese share market closed lower for the first time in five straight sessions, as investors pocketed gains on recent rally, with material, energy and industrial blue chip stocks led declines. The Shanghai Composite Index declined 5.19 points, or 0.24%, to 2122.43. The CSI 300 Index fell 0.38% to 2,341.74.
Shares of materials sector declined the most in Shanghai, with Aluminium Corp. of China and Jiangxi Copper Co. declined at least 1.7%. Baoshan Iron & Steel Co., the biggest-listed steelmaker, slumped after rallying yesterday on speculation steelmakers with excess land would benefit from government land reform.
China Merchants Bank Co. gained 1.9% after raising 27.5 billion yuan ($4.5 billion) in the Shanghai portion of a rights offer.
Figures from the China Petroleum and Chemical Industry Federation said on Thursday that total core business revenue of petrochemical enterprises in China grew 7.35% year on year to RMB 7.35 trillion in the first seven months of this year. The industry's profit grew 11.7% year on year in the period. The petrochemical industry saw a 9.4% increase in value-added output in the period. The value-added output grew 11.9% in the chemical sector, 3.8% in the oil and gas extraction sector and 6.3% in the oil refining sector. The petrochemical industry's fixed-asset investment increased 16.7% year on year to RMB 1.05 trillion in the first seven months. The industry's foreign trade value slid 0.3% to US$371.52 billion in the period. The Federation expected the petrochemical industry to see a higher growth in the third quarter. The industry's core business revenue is expected to 12.5% year on year to RMB 3.37 trillion and its gross profit to rise 17% to RMB 210 billion in the quarter.
In Hong Kong, HK closed sharp higher, following gains on Wall Street overnight, with financials, realty and resources led advances. The Hang Seng Index gained 1.22% and the Hang Seng China Enterprises Index moved higher 1.03%.
Among the 50 HK blue chips, All but one blue chips rose, with one stock remaining unchanged. China Coal was the only blue chip loser. It ended down 1% to HK$4.79. China Resources Enterprise soared 3.5% to HK$23.65, making itself the top blue-chip gainer.
Cathay Pacific jumped 3.3% to HK$13.82 after the carrier accused the authorities for violating the Basic Law by issuing license to Jetstar.
In India, Indian benchmark indices held firm in mid-afternoon trade, after the new central bank Governor Raghuram Rajan announced plans late on Wednesday to bolster the financial industry and stabilize the rupee. Gains in European and Asian stocks supported the Indian bourses. At 14:20 IST, the S&P BSE Sensex was up 357.87 points or 1.93% to 18,925.42. The index spurted 549.97 points at the day's high of 19,117.52 in early trade, its highest level since 16 August 2013. The index rose 290.05 points at the day's low of 18,857.60 in opening trade.
The Indian rupee strengthened against the dollar in the foreign exchange market, after the new head of the central bank on Wednesday, 4 September 2013, announced fresh steps to stabilize the currency and sought to reassure investors. The partially convertible rupee was hovering at 66.29, stronger than its close of 67.065/075 on Wednesday, 4 September 2013. Banks can swap dollars raised from foreign-currency deposits by overseas Indians for rupees with the central bank an annual interest of 3.5%, Reserve Bank of India Governor Raghuram Rajan said late on Wednesday. The RBI also doubled what banks can raise through overseas bonds and allowed them to hedge those dollars at a special rate with the RBI.
The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks on Wednesday, 4 September 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 172.53 crore on Wednesday, 4 September 2013, as per provisional data from the stock exchanges.
Shares of lenders went higher in India after Rajan said that RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country and also said that there is need to reduce the requirement for banks to invest in government securities in a calibrated way so as to ensure the flow of credit to the productive sectors of the economy. Axis Bank jumped after the bank said its total direct and indirect exposure to the National Spot Exchange is insignificant and that the bank has adequate collateral to back these exposures.
Elsewhere, Singapore's Straits Times Index rose 0.8% and Malaysia's KLSE Composite added 0.25%. South Korea's Kospi index jumped 0.96% and Taiwan's Taiex gained 1.06%. Indonesia's JKSE Composite declined 0.55% and New Zealand's NZX 50 Index lost 0.13%.
Trading in US index futures indicated that the Dow could gain 17 points at opening bell on Thursday, 5 September 2013. US stocks jumped on Wednesday after surging US auto sales pointed to robustness in the manufacturing sector. Federal Reserve data released overnight showed that the US economy grew at a modest to moderate pace in July and August, according to the central banks beige book.
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