Saturday, June 29, 2013

Asia stocks boosted by Japan, US indicators

BANGKOK (AP) ? Asian stock markets were boosted Friday by encouraging indicators from Japan and further proof that the U.S. economy is on the upswing.

Reports showing better-than-expected consumer spending, a jump in pending home sales and a drop in jobless claims emboldened investors to dive into riskier assets like stocks. Wall Street posted its third-straight gain of the week.

Japan got a dose of upbeat economic news when the government said industrial production rose 2 percent in May from April, the fourth straight monthly increase, while the most-watched consumer price index stopped falling for the first time in seven months

Japan's Nikkei 225 index surged 3.6 percent to 13,684.37. South Korea's Kospi added 1.3 percent to 1,859.69. Australia's S&P/ASX 200 gained 0.5 percent to 4,833.40.

Investors were also encouraged by comments from key U.S. Federal Reserve officials. The president of the New York branch of the Fed said the central bank would likely keep buying bonds if the economy failed to grow at the pace expected. Jerome Powell, a member of the Fed's board in Washington, said investors appear to have incorrectly concluded that the Fed will taper its purchases soon.

That brought a sign of relief to markets fearing that a pullback by the Fed would deflate stock and commodity markets, where investors have turned due to the low interest rates created by the bond buying program.

Hong Kong's Hang Seng advanced 1.4 percent to 20,723.89 while mainland Chinese shares also rose as fears eased of a credit crunch in China, analysts said.

The central bank had allowed rates that banks pay to borrow from each other to soar last week, part of an attempt by Beijing to clamp down on massive credit in the informal lending industry. Later, however, when Chinese policymakers softened their stance with the promise to provide "liquidity support" if needed.

The central bank's action was "good for the future because it makes merchant banks turn more market-driven and do more prudent lending," said Linus Yip, strategist at First Shanghai Securities in Hong Kong.

Among individual stocks, Japan's Sharp Corp. soared 8.1 percent after announcing it will set up a joint venture with in China with liquid crystal display panel maker Nanjing China Electronics Panda Group Corp., Kyodo News reported. Panasonic gained 7.6 percent. Nintendo added 6.7 percent.

New York stocks got a substantial boost by the National Association of Realtors, which reported that its seasonally adjusted index for pending home sales rose 6.7 percent last month. That's the highest level since December 2006. Separately, the U.S. Commerce Department said consumer spending rose 0.3 percent last month, nearly erasing a similar decline in April. Income rose 0.5 percent.

The Dow Jones industrial average rose 0.8 percent, to 15,204.49. The Standard & Poor's 500 rose 0.6 percent, to 1,613.20. The Nasdaq composite index rose 0.8 percent, to 3,401.86.

Benchmark oil for August delivery was up 11 cents to $97.16 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.55 a barrel to close at $97.05 on the Nymex on Thursday.

In currencies, the euro rose to $1.3062 from $1.3049 late Thursday in New York. The dollar rose to 98.87 yen from 98.36 yen.

Source: http://news.yahoo.com/asia-stocks-boosted-japan-us-indicators-052926878.html

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