Plus   Neg

Asian Shares Follow Wall Street Higher

Asian shares rose broadly on Friday, as an overnight Wall Street rally on hopes of more Fed easing, relief that North Korea's rocket launch has failed and a stock-split announcement from U.S. Internet search provider Google on the back of forecast-beating first-quarter results helped investors shrug off concerns over China's slowing economy.

China's economy grew at its slowest pace in nearly three years in the first quarter, data released today showed, reinforcing concerns about a hard economic landing in the world's second-largest economy. The weaker data, however, spurred talk of further policy easing steps from Beijing to support the economy. Commodities such as copper and crude retreated on demand growth worries, while the euro and yen slipped against the dollar.

Japanese shares gained ground after North Korea's provocative long-range missile launch ended quickly in an embarrassing failure. The Nikkei average rose 1.2 percent, while the Topix index of all Tokyo Stock Exchange First Section added 0.7 percent. Financials such as Nomura Holdings and Mizuho Financial Group rose 3-4 percent as concerns over Europe's debt problems eased.

Heavyweight Fast Retailing soared 8.6 percent after the clothing retailer posted an 11.8 percent rise in its first-half operating profit and projected a record full-year profit due to strong sales at its Uniqlo clothing chain. Sony tumbled 5.5 percent after its chief executive Kazuo Hirai detailed a revival plan that included a plan to slash 10,000 jobs, or about 6 percent of its global workforce.

Meanwhile, Bank of Japan board member Ryuzo Miyao called for increasing government bond purchases by 5 trillion yen ($61.8 billion) to convince markets of the central bank's commitment to its new 1 percent inflation target, minutes from the bank's meeting on March 12 and 13 revealed.

China's Shanghai Composite index ended 0.4 percent higher at a three-week high, as weaker-than-expected GDP data strengthened expectations of further policy easing in the near term. China's gross domestic product expanded 8.1 percent year-over-year in the first three months of 2012, slower than fourth quarter's 8.9 percent growth and below the 8.4 percent growth forecast by economists, data from the National Bureau of Statistics revealed today.

Hong Kong's Hang Seng index rallied 1.8 percent, led by banks after China's March monetary data revealed a much bigger-than-expected rise in bank lending.

Australian shares ended on a firm note, as weaker data on the Chinese economy fueled the prospects for further monetary easing steps by Beijing to address its economic troubles. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index ended up around a percent each.

Miners led the rally, with Rio Tinto climbing 2.3 percent, as commodity prices rose overnight despite a mixed batch of economic data. BHP Billiton gained 1.7 percent and smaller rival Fortescue jumped 4.2 percent. Lynas soared 7.8 percent after the High Court of Malaysia said it will not review a government decision that allows the company to operate a rare earths processing plant in the country.

South Korea's Kospi average rallied 1.1 percent, with cyclicals such as builders and shipyards leading the rebound, after North Korea's much-hyped rocket launch failed. While Pyongyang, North Korea's news agency, said the mission failed to put a weather satellite into orbit, the United States and many other nations condemned the launch as a pretext for testing banned ballistic missile technology.

In economic news, South Korea's central bank today left the key interest rate unchanged for the 10th straight month in April, in line with street estimates. "The inflation expectation that has been remaining high and geographical risks in the Middle East as well as European debt woes still remain as risk factors," the central bank said in a statement.

New Zealand shares wiped out initial gains to end largely unchanged with a positive bias, as slower-than-expected China's first-quarter growth offset optimism over an encouraging start to the U.S. earnings season. New Zealand Refining Company led the gainers on the exchange, climbing 3.7 percent, while PGG Wrightson and Kathmandu Holdings rose around 2.5 percent each.

Fletcher Building, the nation's largest construction company, edged up 0.8 percent, ending higher for a second consecutive session. Exporter Fisher & Paykel Healthcare lost half a percent, heavyweight Telecom eased 0.8 percent and Heartland New Zealand, the would-be bank, fell 1.9 percent.

Elsewhere, India's Sensex was last trading down 1.4 percent, with IT bellwether Infosys plunging 11 percent as it gave much weaker than expected guidance for the next quarter and the rest of the year. Indonesia's Jakarta Composite index was up half a percent, Malaysia's KLSE edged up 0.1 percent, Singapore's Straits Times index rose 0.3 percent and the Taiwan Weighted average gained 1.6 percent.

U.S. stocks rose sharply on Thursday, extending the previous session's rebound, as renewed optimism about the possibility of further quantitative easing by the Federal Reserve and a report from the Commerce Department showing a narrower than expected U.S. trade deficit outweighed disappointing jobless claims data. The Dow and the S&P 500 rose around 1.4 percent each, while the tech-heavy Nasdaq added 1.3 percent.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Market Analysis

Follow RTT