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| Airlines in the region advanced after the oil selloff yesterday. Cathay Pacific Airlines jumped 5.2% |
Hong Kong’s Hang Seng Index rose 1.9% to 22171.95, the Shanghai Composite Index climbed 2.2% to 2746.21, and South Korea’s Kospi rose 1.7% to 2090.81. Japan’s Nikkei Stock Average ended 0.9% higher at 9678.71 and Australia’s S&P/ASX 200 advanced 0.2% to 4508.1.
“Comments from China’s Premier Wen (Jiabao) that Chinese inflation pressures are now under control have seen investors in an optimistic frame of mind heading into the weekend,” said IG Markets strategist Ben Potter.
The Chinese premier wrote in a Financial Times editorial published yesterday that Beijing’s efforts to curb inflation have worked, with price gains now back within a controllable range.
Chinese banks, which have been expecting more monetary-policy tightening to control prices-traded notably higher in Hong Kong, with Bank of China up 2.9%, Agricultural Bank of China leaping 6.4%, China Citic Bank adding 3.5% and China Construction Bank up 3.7%.
However, Bank of America-Merrill Lynch economist Ting Lu cautioned against reading too much into Wen’s statement, citing remarks the premier made to domestic officials earlier this month which “emphasized more difficulties than achievements.”
“Despite these positive messages from Wen (in the editorial), it could be wrong to expect the Chinese government to change its policy stance soon,” the economist said.
Oil prices plunged 4.6% in New York on Thursday after the International Energy Agency unexpectedly said it would release 60mn barrels of oil from strategic reserves onto markets. Crude futures later edged up in Asian trading.
Airlines in the region advanced after the oil selloff, with Cathay Pacific Airlines up 5.2% and Air China soaring 7.8% in Hong Kong. In Sydney, Qantas Airways advanced 1.9%.
Energy companies, by contrast, felt a little pain: Cnooc lost 0.9% in Hong Kong and Japan Petroleum Exploration dropped 0.7% in Tokyo.
News that Greece’s government had agreed with the European Union and International Monetary Fund on its latest five-year austerity plan fueled hopes for progress on the country’s sovereign-debt crisis.
This helped some exporters gain in Tokyo, with Sony rising 2.4%, Toyota Motor closing 1.1% higher and Toshiba adding 4.9%. Sony and Toshiba were also aided by Mitsubishi UFJ Morgan Stanley Securities upgrades; both companies were raised to outperform from neutral.
In Seoul, Samsung Electronics rose 2.5% and LG Display gained 5.2%.
Losses for Telstra weighed once again in Sydney, with the Australian telecom major extending losses as investors continued to show disapproval for its with the Australian government to enable access to its broadband infrastructure. Telstra fell 2.7% yesterday, bringing losses for the week to more than 5%.