Asia shares rebound after Wall St rally

June 26, 2014

Asian markets climbed Thursday, boosted by bargain hunting and a positive lead from Wall Street that came despite a worse-than-expected first quarter contraction in the US economy.

Tokyo rose 0.27 percent, or 41.88 points to 15,308.49, Sydney jumped 1.15 percent, or 62.29 points, to 5464.3 and Seoul added 0.67 percent, or 13.28 points, at 1,995.05.

Shanghai ended 0.65 percent, or 13.18 points, higher at 2,038.68 and Hong Kong rallied 1.45 percent, or 331.13 points, to 23,197.83.

With little to drive business, investors picked up cheap stocks after Wednesday’s sell-off, with sentiment buoyed by a batch of healthy data this week, including Chinese manufacturing and US homes sales and consumer confidence.

In the United States, the Commerce Department said the world’s number one economy shrunk a steep 2.9 percent in the first three months of 2014, sharply worse than the previous estimate of 1.0 percent.

The figure is the worst since the height of the global financial crisis five years ago. But it was widely brushed off by economists, who described it as a blip caused by the severe winter at the start of the year which hammered, among other things, jobs growth and retail sales.

Most expect a strong rebound over the rest of the year.

On Wall Street, the Dow added 0.29 percent and the S&P 500 rose 0.49 percent, while the Nasdaq advanced 0.68 percent.

But while the US growth news had no impact on stocks, the dollar came under pressure, with analysts saying it could have a bearing on when the Federal Reserve decides to hike interest rates.

On foreign exchange markets, the dollar bought 101.78 yen compared with 101.86 yen in New York late Wednesday.

The euro changed hands at $1.3622 and 138.66 yen, against $1.3628 and 138.82 yen.

Oil prices were mixed after hitting nine-month highs in recent weeks on the back of the Iraq crisis, which sparked fears of a supply bottleneck.

US benchmark West Texas Intermediate rose eight cents to $106.58 a barrel, while European benchmark Brent dropped 20 cents to $113.80.

While dealers are still tracking events in the Gulf, fears are have eased for now that a militant drive across the country will see its main oil fields taken over.

Gold fetched $1,311.46 an ounce at 0835 GMT in Asia compared with $1,312.60 late Wednesday.

In other markets:

– Wellington rose 0.50 percent, or 35.61 points, to 5,130.15.

Trade Me was up 1.16 percent at NZ$3.49 and Telecom added 0.19 percent to NZ$2.695.

– Taipei advanced 0.85 percent, or 78.78 points, to 9,320.94.

Smartphone maker HTC rose 1.5 percent to Tw$134.0 while Taiwan Semiconductor Manufacturing Co. was 0.81 percent higher at Tw$124.5.

– Manila climbed 0.84 percent, or 57.50 points, to close at 6,892.18.

Philippine Long Distance Telephone rose 2.0 percent to 2,958 pesos and Ayala Land added 0.32 percent to 31.40 peso.

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