Asian stocks rose broadly on Friday, as softer U.S. data boosted hopes of new stimulus measures from major central banks, including the U.S. Federal Reserve. Commodities rose along with equities after Bank of England Governor Mervyn King said that the case for more stimulus is increasing amid signs of a deterioration in the economic outlook.
The central bank is working with Chancellor George Osborne on a "funding for lending" scheme that would provide funding to banks for an extended period of several years at low rates, King said late Thursday offsetting the news concerning Moody's downgrade of five Dutch banks. Jitters over Sunday's Greek election eased amid the speculation about possible central bank action in case the election results in turmoil.
Angry and despairing Greek voters will return to the polls on 17th after a May 6 election failed to produce a viable coalition government. The poll results will decide whether the beleaguered nation will remain in the euro zone.
Among other key events, the Federal Reserve's two-day policy meeting will begin on 19th and a summit of G20 leaders is scheduled to take place in Mexico next week before the European Union summit due to be held later in the month to discuss the ongoing debt crisis. It remains to be seen if the Fed would extend a program called "Operation Twist" launched in September 2011 to lower long-term borrowing costs.
Tokyo shares ended little changed, with the Nikkei average rising by a marginal 0.01 percent as investors refrained from purchases awaiting the Greek vote. The broader Topix index finished 0.1 percent higher. The Bank of Japan's decision to leave key interest rate unchanged and maintain the size of its 70 trillion yen asset purchase program had virtually no impact on the market.
Renesas Electronics rose 1.3 percent, extending gains for a second day, following reports that the company is in final talks to get 100 billion yen ($1.3 billion) in loans from its major shareholders and lenders to pave way for a restructuring plan. Social networking site operator DeNA soared 12 percent after announcing a share buyback.
Inpex, Japan's largest oil and gas firm by market capitalization, slid 0.7 percent even as oil added to gains made overnight on the back of producer group OPEC's decision to keep its output target unchanged for the second half of the year.
Australian shares ended modestly higher on speculation of more stimulus from the Fed. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index gained about 0.4 percent each. Miners gained ground with higher commodity prices lending support. BHP Billiton rose a modest 0.1 percent, while Rio Tinto gained 0.4 percent and Fortescue added 1.9 percent.
The big four banks also posted modest gains, with ANZ bucking the uptrend to end 0.4 percent lower. Oil & gas firm Woodside Petroleum added a percent and retailer Woolworths edged up 0.4 percent. Shares of Whitehaven jumped 2.9 percent after Coalworks announced that it would ask its shareholders to accept a revised offer of $146 million from Whitehaven Coal.
South Korea's Kospi average slid 0.7 percent, as investors remained wary of the weekend Greek vote that could alter the face of the currency bloc. A retreat in Samsung Electronics added to the selling pressure, with the heavyweight tumbling 3.5 percent after a power failure at its plant in the western city of Asan manufacturing liquid crystal display panels resulted in the temporary suspension of production. Rival SK Hynix fell 2.1 percent after Woori Bank reportedly sold its entire 1.4 percent stake in the memory chipmaker for $202 million.
New Zealand shares rose notably, with heavyweights Telecom and Fletcher Building pacing the gainers on bargain hunting after the NZX-50 index fell to a three-month low yesterday. Telecom climbed 3.1 percent and Fletcher Building rose 2.3 percent, lifting the benchmark index up 0.9 percent.
Retailers were among the prominent gainers, with Hallenstein Glassons, Kathmandu Holdings and Michael Hill International, climbing 3-4 percent, while online auction site Trade Me and gold miner OceanaGold fell about 2.5 percent each.
Elsewhere, China's Shanghai Composite index finished half a percent higher, while Hong Kong's Hang Seng index climbed 2.3 percent to end the week 4 percent higher.
India's benchmark Sensex was last trading up 1.3 percent following reports that the Samajwadi Party and Congress have reached an agreement to nominate finance minister Pranab Mukherjee as the UPA's presidential candidate. Mukherjee may resign from his post on June 24 and could file his nomination papers on June 25, if he is ratified as the presidential candidate at a meeting of UPA leaders this evening, reports say.
Indonesia's Jakarta Composite was up 0.4 percent, Malaysia's KLSE Composite rose half a percent, Singapore's Straits Times index was up 1.3 percent and the Taiwan Weighted average gained 1.1 percent.
On Wall Street, stocks ended with strong gains overnight amid speculation of more economic stimulus following reports that major central banks are preparing coordinated action to provide liquidity if the Greek election leads to chaos in financial markets.
On the economic front, weekly jobless claims unexpectedly rose by 6,000 to a seasonally adjusted 386,000 last week, while consumer prices fell by 0.3 percent in May, the sharpest drop in nearly three years. The Dow rose 1.2 percent, the tech-heavy Nasdaq gained 0.6 percent and the S&P 500 added 1.1 percent.
by RTT Staff Writer
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