Asia bourses rebound after selloff

A man passes before a share prices board in Tokyo. Japanese stocks closed up 267.59 points to 18,991.11 yesterday.AFP/TokyoThe dollar edged closer towards parity with the euro yesterday after the European Central Bank kicked off its stimulus programme this week, while Asian equity markets recovered slightly from a recent sell-off. Sydney shares were given a lift by data showing Australia’s unemployment rate had eased slightly, while South Korea became the latest country to cut interest rates as it struggles to fight off deflation. Tokyo rallied 1.43%, or 267.59 points, to 18,991.11, Sydney added 0.98%, or 56.97 points, to close at 5,850.17 and Shanghai rallied 1.78%, or 58.42 points, to 3,349.32, while Hong Kong advanced 0.34%, or 79.99 points, to 23,797.96. However, Seoul fell 0.52%, or 10.24 points, to close at 1,970.59. In other markets, Kuala Lumpur’s main index closed 0.49% higher, or 8.71 points, at 1,786.87; Malayan Banking was up 0.33% to 9.12 ringgit, AMMB Holdings gained 0.32% to 6.33 ringgit, while RHB Capital dropped 1.53% to 7.74 ringgit. Jakarta closed up 0.37%, or 20.27 points, at 5,439.83; carmaker Astra International gained 0.64% to close at 7,900 rupiah, while Bank Central Asia fell 0.53% to 14,200 rupiah. Singapore fell 0.15%, or 4.99 points, to close at 3,373.60; Singapore Airlines climbed 2.41% to Sg$11.90 while United Overseas Bank (UOB) declined 0.40% to Sg$22.55. Thailand edged up by 0.03%, or 0.5 points, to 1,544.34; media company True Corp rose 1.48% to close at 13.70 baht, while energy giant PTT closed down 0.91% at 327baht. Taipei rose 0.76%, or 72.82 points, to 9,596.00; Taiwan Semiconductor Manufacturing Co gained 1.37% to Tw$148.0 while Cathay Financial Holding added 0.52% to Tw$48.75. Wellington added 0.42%, or 24.80 points, to 5,886.79; Fletcher Building was up 0.68% at NZ$8.84, Spark gained 0.47% to NZ$3.195 and Auckland Airport was 0.78% higher at NZ$4.53. Manila gained 0.63%, or 49.12 points, to 7839.82; top-traded Metropolitan Bank rose 0.32% to 94.15 pesos, while Ayala Corp ended 1.21% up at 754pesos, and Alliance Global added 2.78% to 25.90 pesos. Traders brushed off more losses on Wall Street, where the three main indexes have given up all their 2015 gains on expectations the Federal Reserve will raise interest rates as early as the summer. The Dow fell 0.16%, the S&P 500 shed 0.19% and the Nasdaq eased 0.20%. However, bets on the rate increase, mixed with the ECB’s new asset-purchase scheme, known as quantitative easing (QE), has sent the dollar soaring to 12-year highs against the euro. Yesterday the single currency fetched $1.0542, down from $1.0548 Wednesday in US trade and around its weakest level since March 2003. With the ECB just starting on QE and the Fed due to lift rates, analysts are tipping dollar-euro parity possibly by next year, which would be the first time since 2002. “The asset-purchase programme, which is starting now, that’s obviously going to drive the euro lower,” said Fabian Eliasson, head of US corporate foreign-exchange sales at Mizuho Financial Group. “The dollar is just crushing it across the board.” The euro also bought ¥128.77 against ¥128.10, with investors nervously watching strained talks between Greece and its European creditors over reforming its bailout obligations. The greenback, meanwhile, was at ¥121.30 yesterday in Tokyo against ¥121.44 in New York. “We’ve never seen stimulus created like this before and how you bleed that out is creating a lot of uncertainty as to what’s going to happen,” Michael Cuggino, president of Pacific Heights Asset Management in San Francisco, told Bloomberg TV. “There’s such a divergence between what’s going on in the rest of the world with central banks cutting rates and the US likely raising them.” South Korea’s central bank announced a surprise cut in interest rates to a record low 1.75% yesterday in a bid to avert a painful deflationary spiral and kick-start the struggling economy. The dollar rose to 1,131.55 won from 1,126.40 won on Wednesday. Korea is the latest country—following China, India and Australia—to lower rates in the face of falling prices and weak economic growth. On oil markets US benchmark West Texas Intermediate rose 37 cents to $48.54 while Brent crude rose 42 cents to $57.96. Gold fetched $1,159.90 against $1,157.55 late Wednesday.