Asian stocks gained sharply Tuesday after reports that policy makers are considering new plans to support European countries struggling with debt fueled hope that a solution to the region’s woes could be in sight.
In Tokyo, the Nikkei 225 Index sprinted ahead 235.82 points, or 2.8%, to 8,609.95
In Hong Kong, the Hang Seng Index recovered a whopping 722.75 points, or 4.2%, to 18,130.60
Speculation grew in the European and U.S. trading sessions Monday that the European Central Bank will cut its key cash rate when it meets next week, and that a plan may be introduced to help shore up the finances of struggling members of the monetary bloc.
That plan would reportedly include a massive increase in the funds available for lending via the European Financial Stability Fund. Selected banks may be recapitalized as well
Financials were rebounding after posting sharp losses in recent weeks on concerns over fallout from Europe to the global financial system, with Sumitomo Mitsui Financial Group Inc. up 3.4% and Mitsubishi UFJ Financial Group Inc. up 4.3% in Japan.
National Australia Bank Ltd. gained 5.8% and Commonwealth Bank of Australia rose 3.9% in Australia, while insurance firm Ping An Insurance Group Co. surged 10.1% in Hong Kong after the company said late Monday that major shareholders weren’t planning to unload stock.
Noting that the insurer posted heavy losses on Monday, Goldman Sachs analysts said that they believe the drop was overdone and reiterated their buy rating on the shares.
Commodity-sector firms were also advancing strongly as oil, copper and gold future gained sharply in electronic trading.
Hong Kong-listed oil giant Cnooc Ltd. climbed 7.7%, while Aluminum Corp. of China Ltd. jumped 6.7%.
Iron-ore producer Fortescue Metals Group Ltd. surged 6.7%, and diversified metals group BHP Billiton Ltd. rose 4.1% in Sydney.
Commodity firms as well as other companies closely linked to expectations for the health of the global economy were rebounding from recent heavy losses made amid worries that Europe’s debt troubles would lead to a deep downturn in global growth.
Chip maker Hynix Semiconductor Inc. jumped 5%, and auto maker Hyundai Motor Co. advanced 5.9% in South Korea.
Apparel export firm Esprit Holdings Ltd climbed 7.2% and Li & Fung Ltd. jumped 7.5% in Hong Kong, while Subaru-maker Fuji Heavy Industries Ltd. rose 4.7% in Tokyo.
Shipbuilders and steelmakers were also on the march upward, with Hyundai Heavy Industries Co. surging 11.4% in Seoul, and Japan Steel Works Ltd. up 4.1% in Tokyo.
Still, experts are cautious about the prospect for continued gains for Asian equity markets.
In other markets;
Shanghai’s CSI 300 Composite Index gained back 26.96 points, or 1%, to 2,637.88
Taiwan’s Taiex Index ballooned 212.83 points, or 3.1%, to 7,089.95
Korea’s Kospi Index zoomed 83 points, or 5%, to 1,735.71
Singapore’s Straits Times Index jumped 71.60 points, or 2.7%, to 2,725.91
New Zealand’s NZX 50 Index improved 37.45 points, or 1.2%, to 3,292.83
Australia’s S&P/ASX 200 Index leaped 140.70 points, or 3.6%, to 4,004.60
