Asia markets rise on Wall St lead

AFP/Tokyo

Asian markets rose yesterday  following Wall Street’s lead, as tensions over emerging markets eased and ahead of a Federal Reserve decision on its stimulus programme.

Tokyo stocks jumped 2.70%, or 403.75 points, to 15,383.91 as the dollar climbed and confidence rose after the central banks of India and Turkey increased interest rates, countering a sell-off in their currencies.

Seoul rose 1.26%, or 24.22 points, to 1,941.15 and Sydney finished 1.04%, or 53.9 points, higher at 5,229.0.

Hong Kong added 0.82%, or 180.97 points, to end at 22,141.61 and Shanghai rose 0.56%, or 11.40 points, to 2,049.91.

Taipei was closed for a public holiday. In other markets, Kuala Lumpur gained 0.45%, or 7.98 points, to close at 1,789.23; shipping company MISC added 2.1% to 5.87 ringgit, while SapuraKencana Petroleum rose 1.6% to 4.38. Plantation giant IOI Corp fell 0.5% to 4.15 ringgit.

Bangkok slipped 0.03%, or 0.37 points, to 1,271.42; coal producer Banpu was unchanged at 26.50 baht while energy giant PTT fell 1.44% to 274baht.

Jakarta ended up 1.74%, or 75.70 points, at 4,417.35; retailer Ramayana Lestari Sentosa rose 4.55% to 1,265 rupiah, while cigarette maker Hanjaya Mandala Sampoerna fell 0.15% to 65,950 rupiah.

Singapore closed down 0.47%, or 14.48 points, at 3,047.93; oil rig maker Keppel Corp eased 0.75% to Sg$10.54 while DBS bank was down 0.78% to Sg$16.52.

Wellington rose 0.71%, or 34.28 points, to 4,882.72; Fletcher Building was up 1.48% to NZ$8.90 and Air New Zealand was down 1.16% at NZ$1.70.

Manila added 0.78%, or 47.03 points, to 6,069.84; Alliance Global ended 1.11% higher at 27.30 pesos and SM Prime Holdings was 2.15% up at 15.18 pesos, while Philippine Long Distance Telephone added 0.07% to 2,706 pesos. With the stability of emerging economies back on the agenda, dealers are waiting to find out what the Fed plans to do with its huge stimulus programme.

Last month the Fed said it would reduce the bond-buying by $10bn a month to $75bn from January, citing an improved US economy.

While it has been credited with fuelling an investment boom in developing countries, there are fears that the removal of the cheap cash will lead to huge capital outflows.

Those fears were brought into focus last week when Argentina’s peso slumped 14% against the dollar, leading to a sell-off in the currencies of other emerging nations such as Indonesia, India and Thailand. That in turn sent global markets tumbling.

However, tensions eased somewhat on Tuesday after India and then Turkey—whose currencies have come under pressure—raised their borrowing rates. The Reserve Bank of India lifted its benchmark repo rate, at which it lends to commercial banks, by 25 basis points to 8.0%. Hours later Turkey hiked its overnight lending rate to 12% from 7.75%.

The dollar eased to 2.1794 lira, down from 2.2520 lira before the announcement, and well off its 2.39 lira peak on Monday. A more upbeat outlook helped the dollar rise against the yen, which is considered a safer bet in times of uncertainty.

In afternoon Tokyo trade, the dollar fetched 103.23 yen against 102.97 yen in New York Tuesday.

The euro inched up to 141.05 yen from 140.73 yen while also sitting at $1.3665 against $1.3667.

Daisuke Uno, strategist at Sumitomo Mitsui Banking Corp, told Dow Jones Newswires: “With Turkey and India raising interest rates and the US Fed set to make its decision on policy soon, markets are still cautious.”

He said there was a 70% chance the Fed would cut its stimulus but added that it may wait until the next meeting. “The central bank is walking a very narrow tightrope, and dares not further upset emerging markets.”

Pedestrians walk in front of a quotation board displaying the Nikkei key index of the Tokyo stock exchange yesterday. Tokyo stocks ended 2.70% higher, ending a four-session losing streak.