The region's markets had also climbed the previous day as opinion polls suggested Britain would vote to remain in the European Union in a crucial referendum next month.
The positive news cycle kicked off as opinion polls suggested Britain would vote to remain in the European Union in a crucial referendum next month. Bank of England Governor Mark Carney made clear the extent of damage a Brexit would do to the UK economy. With voters looking less likely to opt out of the EU on June 23, the risk of another full blown existential crisis for the Euro-Zone seems less likely.
Then, yesterday's April US New Home Sales report was the best in eight years, which in turn sent US equities higher: the strengthening housing market should bode well for consumption trends. The solid U.S. home sales increased speculation the world's biggest economy can withstand higher interest rates. Sales of new homes in the US surged 16.6% in April 2016, the fastest pace of increase in more than eight years, data released yesterday, 24 May 2016, showed.
St. Louis Fed President James Bullard told that U.S. labor data suggested it was time to pull the trigger on a rate hike. The U.S. central bank kept its target overnight interest rate in a range of 0.25 percent to 0.5 percent in its April meeting, indicating in its meeting minutes that June could be the time to hike.
Sentiment was boosted further Wednesday after eurozone ministers clinched a vital agreement with Greece to unlock more bailout cash and start tackling the country's debt mountain. The deal releases 10.3 billion euros ($12 billion) in bailout funds that Greece urgently needs to repay big loans to the European Central Bank (ECB) and International Monetary Fund (IMF) in July, having already fallen behind in paying for everyday government duties and wages.
Among Asian bourses
Australia Market soars
Australian share market closed sharply higher, as risk appetite buying underpinned on tracking strong lead from European and US markets overnight and rebound in crude oil and base metal prices. Barring bullion all ASX sectors surged, with energy, telecom, financial, and material companies being major gainers. At close of trade, the benchmark S&P/ASX 200 index inclined 76.90 points, or 1.45%, to 5372.50. The broader All Ordinaries added 74.90 points, or 1.4%, to 5436.80. Rising stocks outnumbered declining ones on the Australia Stock Exchange by 592 to 418 and 358 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 6.21% to 16.796.
Shares of materials and resources and energy companies inclined on tracking overnight lift in almost all commodities bar iron ore. Global miner BHP Billiton advanced 2.8% to A$18.90 and Rio Tinto jumped 1.9% to A$45.03. Pure-play iron ore producer Fortescue Metals added 1.8% to A$2.90. Boral added 2.4% to A$6.82 after reaffirming full year profit guidance.
Shares of banks and financial companies all added weight, with Commonwealth Bank up 1.1% to A$78.39, ANZ Banking Group up 2% to A$25.28, Westpac Banking Corp up 2.2% to A$30.44, and National Australia Bank up 1.9% to A$27.48. CYBG, the Clydesdale Bank in the UK the NAB spun off earlier this year, was up more than 11% to A$5.27 after posting better than expected results for the six months to March.
Programmed Maintenance Services shares jumped 13% to A$1.655 despite reporting a net loss of A$98 million for the year to March. However, the company reaffirmed guidance for the new financial year.
Japan Stocks soar on weaker yen, hopes for tax hike delay
The Japan share market climbed up, following strong rally on Wall Street overnight and yen weakness against the greenback. Investors also took heart from higher crude oil futures prices and hopes that Japan's scheduled sales tax hike next year will be delayed. However, the market's topside was capped amid a wait-and-see mood ahead of a two-day Group of Seven summit that will start in Ise-Shima, Mie Prefecture, on Thursday. The 225-issue Nikkei average climbed up 258.59 points, or 1.57%, to close at 16,757.35. The Topix index of all first-section issues ended up 16.38 points, or 1.23%, at 1,342.88. Rising issues outnumbered falling ones 1,333 to 474 in the TSE's first section, while 146 issues were unchanged.
Japanese export-related companies rebounded due to the weaker Japanese currency -- a positive for their profitability. They included automaker Toyota, Fuji Heavy and Mazda, industrial robot producer Fanuc and tire maker Bridgestone.
Shares of electronics maker Sony surged 6.46 percent as worries eased about the negative earnings impact of a series of powerful earthquakes that hit Kumamoto Prefecture, where a Sony plant is located, recently. On Tuesday, the company announced a relatively brisk operating profit estimate for the current fiscal year.
China Market falls on yuan depreciation woes
Mainland China stock market finished lower for second straight session, as yuan depreciation fears resurfaced on the back of a stronger dollar and a possible U.S. rate hike next month. Most sectors fell, with transportation shares leading the decline. The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.14%, to 3,059.23, while the Shanghai Composite Index lost 0.23%, to 2,815.09 points.
There are fresh worries about money outflows as the U.S. looks increasingly likely to raise interest rates again soon. China's central bank guided the yuan to its weakest level against the U.S. dollar in more than five years. In the past, a weakening of the currency by The People's Bank of China has been a sign of greater concern about the economy, but such moves also track the dollar, which strengthened to its highest levels in two months amid rising expectations of higher interest rates in the U.S.
The yuan eased to within a whisker of its early February trough on Wednesday, after the People's Bank of China set the yuan fixing against the U.S. dollar at 6.5693 on Wednesday, its weakest level since March 2011. With the dollar back on an appreciation course, a weak yuan central parity has not been rare in past weeks. On May 4, also a Wednesday, the PBOC set the yuan mid-point weaker by 0.59%, its biggest one-day drop since the one-off 1.86% devaluation move on August 11 last year. Traders are closely watching these PBOC daily fixings to confirm their worries that a new round of yuan weakness is ahead, probably until the end of the second quarter. Wednesday's mid-point has no doubt added a heavy chip to such bets.
Shares of airline carriers led declines in Shanghai as a rebound in fuel prices may hurt earnings. Juneyao Airlines Co. plunged 9 percent, while China Southern Airlines Co. lost 4.6 percent.
Hong Kong Market ends higher
The Hong Kong stock market advanced, following gains on the Wall Street overnight, on growing prospect of a US rate rise in the near future after surge in US home sales. The benchmark Hang Seng Index advanced 537.62 points, or 2.71%, to 20368.05 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 229.82 points, or 2.77%, to 8536.38. Turnover increased to HK$62 billion from HK$44.7 billion on Tuesday.
Energy companies rallied the most in Hong Kong, with China Shenhua Energy Co. gaining 6.1 percent after the Economic Information Daily reported China's four biggest coal producers may consider a price increase in June. PetroChina advanced 3.9 percent. PetroChina (00857), CNOOC (00883) and Sinopec (00386) all jumped 4% to HK$5.25, HK$9.18 and HK$5.33.
Shares of coal miners rallied after Mainland media reported that Big Four coal mining companies plan price hike in June. China Shenhua (01088) surged 6% to HK$12.56, becoming the best performing blue chip today. China Coal (01898) and Yanzhou Coal (01171) also shot up 9% and 8% to HK$3.31 and HK$4.14.
Sensex, Nifty attain 4-week closing high
Banking, auto, IT sector stocks and index heavyweights HDFC and ITC led the rally on the domestic bourses triggered by gains in global stocks. The barometer index, the S&P BSE Sensex, jumped 575.70 points or 2.28% to settle at 25,881.17. The Nifty jumped 186.05 points or 2.4% to settle at 7,934.90. The two key benchmark indices extended gains in late trade after hovering in positive zone throughout the trading session after opening with upward gap. All the 19 sectoral indices on BSE registered gains.
The rally on the domestic bourses was further aided by a foreign brokerage upgrading the Indian equity market to 'overweight' from 'equalweight'. According to media reports, the brokerage has cited attractive valuations of Indian stocks compared with other emerging markets, the country's strong macroeconomic fundamentals, a recovery in earnings growth, prospects for the passage of the goods and services tax (GST) bill in the Rajya Sabha, expectation of good monsoon this year and likely further easing of interest rates by the Reserve Bank of India (RBI) as reasons for upgrading India's rating.
Stocks of oil exploration and production firms edged higher on rise in crude oil prices. Metal shares edged higher as copper prices rose in global commodities markets. Tech Mahindra surged on reports that a domestic brokerage has raised its price target while retaining its accumulate rating on the stock after the announcement of the company's Q4 March 2016 results. Cipla dropped after announcement of dismal Q4 March 2016 results.
Shares of two-wheeler maker Bajaj Auto surged after the company's strong Q4 March 2016 results. Bharat Heavy Electricals (Bhel) edged higher after the company's announcement that it has successfully commissioned the first 800 megawatts (MW) supercritical thermal unit in Karnataka, which is also the highest rating unit in the state.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 inclined 0.51% to 6908.04. South Korea's KOSPI index grew 1.18% to 1960.51. Taiwan's Taiex index rose 1.15% to 8396.20. Malaysia's KLCI rose 0.31% to 1630.95. Indonesia's Jakarta Composite index added 1.327% to 4772.98. Singapore's Straits Times index grew 0.6% to 2766.65.
Powered by Capital Market - Live News
