Asian stocks climb after Fed lowers interest rates
Monday, 24 September 2007
SINGAPORE, Sept 23 (Bloomberg): Asian stocks rose this week after the US Federal Reserve cut its benchmark lending rate by half a per centage point to bolster growth in the world's largest economy.
Nintendo Co., the No. 1 maker of portable game players, advanced for the first time in three weeks. BHP Billiton Ltd. led commodities shares higher after oil jumped to a record. Posco, South Korea's biggest steelmaker, surged to a high after US steel inventories fell.
``There's a good chance the US will avoid a recession and that's behind this relief rally,'' said Leslie Phang, who helps oversee $1 billion at Commonwealth Private Bank in Singapore. ``Investors will be more confident taking on more risk.''
The Morgan Stanley Capital International Asia-Pacific Index added 2.3 per cent to 155.81, as nine out of the 10 industry groups advanced.
Japan's Nikkei 225 Stock Average advanced 1.2 per cent this week. All markets in the region climbed, except for Sri Lanka. Benchmarks set records in Hong Kong, India and China.
Sumco Corp., the world's second-largest maker of silicon wafers, led a slump by semiconductor-related shares on signs prices for memory chips will continue to drop, denting earnings.
Nintendo, which made two-thirds of its sales abroad last year, rose 4 per cent to 57,600 yen. Hyundai Motor Co., which sells overseas nearly four out of every five cars, added 2.5 per cent to 70,600 won.
The Fed lowered its key overnight rate to 4.75 per cent from 5.25 per cent on Sept. 18. The reduction, more than most economists in a Bloomberg survey predicted, was the first cut in four years and sparked the biggest rally in a month among Asian shares.
BHP, the world's largest mining company and Australia's biggest oil explorer, rose 4.1 per cent this week to A$41, hitting a record on Sept. 20. Nippon Oil Corp., advanced 3.9 per cent to 1,066 yen. Zijin Mining Group Co., operator of China's biggest gold mine, soared 40 per cent to HK$12.70 in Hong Kong.
Crude oil for October delivery, whose contract expired on Sept. 20, reached a record intraday price of $83.90 before settling at $83.32. A measure of six metals traded on the London Metal Exchange, including copper and zinc, jumped 3.9 per cent this week.
The Fed's move led to the dollar falling against most global currencies, sparking a flight to gold, which is considered a hedge against weakness in the US currency. Gold rose to $739.30 per ounce during trading on Sept. 21, the highest since 1980.
Posco advanced 9.6 per cent to 671,000 won. The company said this week it won a $350 million order to build India's largest blast furnace. Sumitomo Metal Industries Ltd., Japan's third- largest steelmaker, surged 14 per cent to 638 yen after raising the price of steel pipes used in oil rigs by 10 per cent.
Nintendo Co., the No. 1 maker of portable game players, advanced for the first time in three weeks. BHP Billiton Ltd. led commodities shares higher after oil jumped to a record. Posco, South Korea's biggest steelmaker, surged to a high after US steel inventories fell.
``There's a good chance the US will avoid a recession and that's behind this relief rally,'' said Leslie Phang, who helps oversee $1 billion at Commonwealth Private Bank in Singapore. ``Investors will be more confident taking on more risk.''
The Morgan Stanley Capital International Asia-Pacific Index added 2.3 per cent to 155.81, as nine out of the 10 industry groups advanced.
Japan's Nikkei 225 Stock Average advanced 1.2 per cent this week. All markets in the region climbed, except for Sri Lanka. Benchmarks set records in Hong Kong, India and China.
Sumco Corp., the world's second-largest maker of silicon wafers, led a slump by semiconductor-related shares on signs prices for memory chips will continue to drop, denting earnings.
Nintendo, which made two-thirds of its sales abroad last year, rose 4 per cent to 57,600 yen. Hyundai Motor Co., which sells overseas nearly four out of every five cars, added 2.5 per cent to 70,600 won.
The Fed lowered its key overnight rate to 4.75 per cent from 5.25 per cent on Sept. 18. The reduction, more than most economists in a Bloomberg survey predicted, was the first cut in four years and sparked the biggest rally in a month among Asian shares.
BHP, the world's largest mining company and Australia's biggest oil explorer, rose 4.1 per cent this week to A$41, hitting a record on Sept. 20. Nippon Oil Corp., advanced 3.9 per cent to 1,066 yen. Zijin Mining Group Co., operator of China's biggest gold mine, soared 40 per cent to HK$12.70 in Hong Kong.
Crude oil for October delivery, whose contract expired on Sept. 20, reached a record intraday price of $83.90 before settling at $83.32. A measure of six metals traded on the London Metal Exchange, including copper and zinc, jumped 3.9 per cent this week.
The Fed's move led to the dollar falling against most global currencies, sparking a flight to gold, which is considered a hedge against weakness in the US currency. Gold rose to $739.30 per ounce during trading on Sept. 21, the highest since 1980.
Posco advanced 9.6 per cent to 671,000 won. The company said this week it won a $350 million order to build India's largest blast furnace. Sumitomo Metal Industries Ltd., Japan's third- largest steelmaker, surged 14 per cent to 638 yen after raising the price of steel pipes used in oil rigs by 10 per cent.