The stock markets across the Asia-Pacific region were trading sharply higher on Thursday, despite a mixed close on Wall Street overnight, as central banks around the globe moved to ease interest rates to shore up the markets. Hong Kong, China, and Taiwan cut their key interest rates after the Federal Reserve slashed its benchmark interest rate by half a percentage point to 1% on Wednesday. Meanwhile, South Korean stocks surged nearly 10% and the Singapore market extended its gains into a third straight session after their central banks signed a swap facility with the U.S. Federal Reserve that will give them access to U.S. dollar liquidity of up to $30 billion. The Japanese market gained nearly 4% and the Australian stocks were up about 3%. Oil prices continued to rise on Thursday after the December contract surged Wednesday, snapping a four-session losing streak.
U.S. stocks closed mixed on Wednesday, as some investors rushed to lock in profits following the previous session's big advance, after the Federal Reserve cut its fed funds rate. The Dow closed down 74 points or 0.8% at 8,991 and the S&P 500 index fell 10 points or 1.1% to 930, while the technology-heavy Nasdaq composite index advanced 7.7 points or 0.5% to 1,657.
Oil prices surged Wednesday, buoyed by a global stock market rally, a U.S. interest rate cut and weaker-than-expected U.S. energy stockpiles. New York's main contract, light sweet crude for December delivery jumped $4.77 to close at $67.50 a barrel. In the Asian session Thursday, crude was up $2.13 at $69.63 a barrel by 10:22 p.m. ET.
In currency trading, the U.S. dollar was quoted in the lower 98 yen-level in early Tokyo deals, up from Wednesday's close in the upper 96-yen range in Tokyo. The South Korean won rose sharply against the U.S. dollar on expectations that a currency swap deal between Seoul and Washington would ease concerns about a dollar shortage faced by local banks. In early trade, the won was quoted at 1,357.1 a dollar. The Australian dollar opened stronger at US$0.6705-0.6714 and the kiwi strengthened to US$0.5867 in early local deals.
The Japanese stock market was trading higher for the third straight session as export-oriented stocks advanced on the back of a weaker yen. The market was also buoyed by continued expectations that the Bank of Japan will cut interest rates later in the week. At 8.38 P.M. ET, the benchmark Nikkei 225 Index was advancing 162.51 points or 1.98% to 8,374.41 and the broader Topix Index of all First Section Issues was gaining 19.66 points to 849.98.
On the economic front, Japan's Ministry of Finance reported that foreigners dumped a net 276.6 billion yen worth of Japanese stocks for the week ended October 25. It was their second straight week as net sellers. Foreigners also sold a net 95.7 billion yen in Japan bonds and notes for the week. Meanwhile, Japan residents remained net purchasers of foreign-based stocks, having bought a net 201.8 billion yen worth. However, they became net sellers of foreign bonds and notes, dumping a net 911.8 billion yen worth after having been net buyers the week before.
In the banking sector, Mitsubishi UFJ added 0.34%, Mizuho Financial rose 3.09% and Resona Holdings gained 3.56%. However, Sumitomo Mitsui eased 0.88% after said it would fall 63% short of its earnings target for the full year.
Automaker Toyota soared 4.00%, Honda gained 4.29%, Nissan rose 2.97% and Mazda jumped 6.06%. Among export-oriented stocks, Sony advanced 1.97% and Nikon gained 3.51%. In the tech space, Advantest added 0.32%, Kyocera gained 6.63%, Fujitsu improved 0.81% and Fanuc advanced 1.94%.
In the oil sector, Inpex Holdings soared 8.02% and Showa Shell added 0.51%, while Nippon Oil dipped 2.91%. Trading house Marubeni soared 5.93% and Sojitz gained 4.67%.
The South Korean stock market was trading sharply higher, reversing Wednesday's losses, after opening more than 7% higher on the back of a news of a currency swap deal with the United States. At 9:10 p.m. ET, the benchmark Korea Composite Stock Price Index or KOSPI was up 61.16 points, or 6.31%, at 1,030.13. Steep gains in early trading forced the Korea Exchange to suspend program trading for five minutes after the main index's futures prices rose more than 5%.
The U.S. Federal Reserve announced Wednesday that it will sign a currency swap arrangement of up to US$30 billion each with the central banks of South Korea, Mexico, Brazil and Singapore, to help improve liquidity conditions in the global financial markets and to mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well-managed economies.
South Korea's central bank said that current account deficit narrowed sharply in September from a record high in the previous month, as oil prices fell and exports remained bullish. The current account shortfall stood at $1.22 billion in September compared to a deficit of $4.7 billion the previous month. For the January-September period, the cumulative deficit was $13.8 billion compared to a surplus of $2.8 billion a year earlier.
In the tech space, Hynix Semiconductors jumped 6.3%. The company said that its net loss widened sharply in the third quarter on lower chip prices and increased foreign debts due to a weaker local currency. Net loss for the July-September period was 1.65 trillion won compared to a loss of 707 billion won three months earlier. Market heavyweight Samsung Electronics surged 7.4%, LG Display soared 12.5%, and LG Electronics rose 9.6%.
Automaker Hyundai Motor gained 6.4% and top steelmaker POSCO soared 9.6%.
In the financial sector, Shinhan Financial Group added 3.1% and Mirae Asset Securities jumped 9.2%, but Woori Finance lost 1.4%.
The Australian stock market was trading sharply higher, extending Wednesday's gains, despite a mixed lead from Wall Street overnight. Major miners and energy companies were higher in early trade on the back of stronger commodity prices. At 9:15 p.m. ET, the benchmark S&P/ASX 200 index was gaining 93 points or 2.42% to 3,939, after closing up 1.34% on Wednesday. The broader All Ordinaries index was advancing 92 points or 2.42% to 3,898.
On the economic front, a private sector barometer of Australia's business conditions registered positive readings in August. The Conference Board reported that its leading index for Australia increased 0.4% in August, the sixth straight month of increases. The coincident index, which measures current economic activity, increased a modest 0.1% in August.
Among banking stocks, Commonwealth Bank of Australia lost 1.61%, and ANZ Banking Group edged down 0.35%, while National Australia Bank rose 2.12%. Westpac was unchanged, investment bank Macquarie Group was up 1.72%, and St. George bank gained 2.02%.
Australia's second biggest bank, Westpac Banking increased full-year cash earnings by 6% to A$3.73 billion, on strong loan and deposits growth and in line with analysts' estimates, ahead of completing its takeover of St George Bank.
In the resources sector, index leader BHP Billiton advanced 4.52% and Rio Tinto gained 5.88%. Gold miners were stronger, after gold closed higher for a fourth straight session on Wednesday. Sino Gold soared 17.32%, Lihir Gold climbed 13.95% and Newcrest Mining advanced 5.45%.
Among energy stocks, Oil Search soared 19.41%, Woodside rose 6.25% and Santos climbed 10.71%.
In the retail sector, David Jones fell 1.96%, while giant retailer Woolworths gained 2.50%, and Coles' owner Wesfarmers rose 3.49%.
BlueScope Steel rose 5.9% after it booked a net profit after tax for the first quarter of A$430 million, outperforming the first half results of last year, boosted by strong global steel demand and prices.
The New Zealand stock market opened slightly higher, with the benchmark NZX 50 index adding 12.30 points or 0.45% to 2,757.90 and the broader NZX All Capital index gaining 15.63 points or 0.56% to 2,804.84.
On Thursday's economic data calendar, Statistics New Zealand is scheduled to report September building permit issuances at 21:45 GMT
In the early trading on the New Zealand stock market on Thursday, the country's top ranked share Telecom gained 1.81%, while the second ranked Contact Energy lost 0.70%. Fletcher Building, the third best stock, added 0.71%.
In the retail sector Hallenstein Glasson and the Warehouse remained unchanged, while jewelry retailer Michael Hill International advanced 1.45% and Pumpkin Patch surged 3.96%.
In the energy sector Vector eased 0.50%, while TrustPower remained unchanged in the day's early trading.
Among the dual listed issues AMP, Australia and NZ Banking Corp, APN News & Media, Telstra and Westpac Bank remained unchanged, as Lion Nathan slipped 2.06%.
Other Asian markets
Hong Kong's Hang Seng index was up 5.3% at 13,378; China's Shanghai composite index was up 1.6% at 1,747; Singapore's Straits Times index was up 3.9% at 1,737; Taiwan's weighted index was up 5.4% at 4,643; Malaysia's KLCI was up 17 points at 846; and Indonesia's Jakarta Composite index was up 3.8% at 1,1568.
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