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Asian Shares Rise After US Bank Rule Change

us premarket 010219 26jun20 lt

Asian stocks rose on Friday after U.S. regulators eased bank rules that will free up billions of capital. The news helped offset worries about a continued surge in coronavirus cases in the United States.

After the U.S. closing bell, the Federal Reserve said the nation's biggest banks are healthy but could suffer up to $700 billion in losses on soured loans if the economy languishes. The Fed ordered them to cap dividend payments and suspend share buyback programs.

Markets in Taiwan and China were closed for the Dragon Boat Festival. Hong Kong's Hang Seng index dropped 0.93 percent to 24,549.99 as the U.S. Senate passed a bipartisan bill by unanimous consent that would impose sanctions on China for its decision to implement national security laws in Hong Kong and Macau.

Japanese shares rose sharply, with banks gaining ground after U.S. regulators announced plans to ease regulations that will allow banks to invest in risky assets such as venture capital funds.

The Nikkei average rose 252.29 points, or 1.13 percent to 22,512.08, rebounding from a 1-1/2-week closing low hit in the previous session. The broader Topix index closed 0.99 percent higher at 1,577.37.

Lenders Mitsubishi UFJ Financial Group, Mizuho Financial and Sumitomo Mitsui Financial rose between 1.3 percent and 1.7 percent on hopes that easing of U.S. bank rules will make life easier for large banks with complex trading and investment portfolios.

Heavyweight SoftBank Group jumped over 3 percent. The tech conglomerate announced that it would buy back up to 5.75 percent of own shares worth 500 billion yen ($4.7 billion) through March 31, 2021.

Overall consumer prices in the Tokyo area were up 0.3 percent year-on-year in June, the Ministry of Internal Affairs and Communications said. That missed expectations for an increase of 0.6 percent and was down from 0.4 percent in May.

Core CPI, which excludes volatile food prices, was up an annual 0.2 percent - in line with expectations and unchanged from the May reading.

Australian markets rebounded even as Victoria recorded its tenth straight day of double-digit growth in virus cases. The benchmark S&P/ASX 200 index climbed 86.40 points, or 1.49 percent, to 5,904.10.

The big four banks as well as miners BHP, Fortescue Metals Group and Rio Tinto rallied 2-3 percent. Energy stocks such as Beach Energy, Woodside Petroleum and Oil Search rose around 2 percent after oil prices climbed overnight on optimism about recovering fuel demand. Origin Energy advanced 3.1 percent.

Airline Qantas Airways plunged 9.1 percent after completing a capital raising through an institutional placement.

Seoul stocks posted strong gains, led by large-cap technology stocks. The benchmark Kospi jumped 22.28 points, or 1.05 percent, to 2,134.65. Heavyweight Samsung Electronics climbed 2.7 percent.

Consumer sentiment in South Korea ticked higher in June, the latest survey from the Bank of Korea showed today with a consumer survey index score of 81.8, up from 77.6 in May. Consumer sentiment regarding current living standards was 5 points higher than in May at 84, while the future outlook for living standards was 2 points up to 87.

New Zealand shares ended on a flat note, with the benchmark NZX 50 index ending up 4.87 points at 11,129.93, led by utility stocks like Contact Energy.

U.S. stocks rose sharply overnight after regulators announced plans to ease restrictions on large banks' investments and a report showed U.S. orders for durable goods jumped in May by the most in nearly six years.

The Dow Jones Industrial Average rallied 1.2 percent, while the tech-heavy Nasdaq Composite index and the S&P 500 climbed around 1.1 percent each.

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