Asian markets shot skyward Thursday, with benchmarks in Japan, Hong Kong and Seoul rocketing 10% or more, after central banks responded strongly to slowing economic growth and turmoil in financial markets by reducing interest rates or boosting access to U.S.-dollar liquidity.
The benchmark Nikkei climbed 817.9 points or 9.9% to close at 9,029.8, its highest close since October 22
The Federal Reserve cut U.S. interest rates by a half-percentage point to 1% on Wednesday and left the door open for further reductions. Meanwhile, expectations grew that Japan's central bank would also cut its interest rates for the first time in seven years when its policy board meets on Friday.
In other economic news, 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.
Among exporters, electronics parts maker Kyocera jumped 9.2%, Canon and Toyota Motor surged 11.4% each, Honda Motor soared 13.1%, and Sony gained 12.3%.
Toyota denied a Kyodo news report that the U.S. automaker General Motors had asked for help in turning around its business.
Commodity-related firms surged after base metals prices and crude oil prices climbed on Wednesday. Mitsubishi Corp soared 17.9% and Mitsui & Co gained 12.0%. Inpex Holdings surged 10.0%, Nippon Mining Holding jumped 10.3%, and Nippon Oil gained 7.8%.
Among shippers, Kawasaki Kisen soared 19.8% and Mitsui O.S.K. Lines jumped 17.9%. Nippon Yusen advanced 13.7%.
In the banking sector, gainers included Mitsubishi UFJ 6.4%, Mizuho Financial 18.2%, and Sumitomo Mitsui 12.4%. Sumitomo Mitsui said that it would fall 63% short of its earnings target for the full year. Japan's top brokerage firm, Nomura Holdings, rose 11.6%.
Mobile services provider Softbank closed limit-up after the company reported solid second-quarter results and profit growth forecasts. Game maker Nintendo climbed 10.9% ahead of its second-quarter earnings announcement later today.
Toshiba rose 6.4% despite reporting a 26.85 billion yen second-quarter net loss compared to a 25.03 billion yen net profit a year ago.
CHINA
The Chinese stock market posted modest gains, led by financial stocks and refiners, after the central bank cut interest rates on Wednesday and other regional markets staged a rally. The benchmark Shanghai Composite Index opened lower, but closed up 43.80 points or 2.6% at 1,763.61.
The People's Bank of China on Wednesday cut the benchmark one-year lending and deposit rates by 27 basis points, its third rate cut in six weeks to revive a slowing economic growth.
Refiners and miners rose after crude oil prices climbed above $69 a barrel on the New York Mercantile Exchange in Asian trading. Index heavyweight PetroChina jumped 3.4% after the company announced a 30% increase in net profit for the third quarter and refiner China Petroleum & Chemical Corp. or Sinopec, also advanced 3.4%. China Shenhua Energy surged 4.2% and Kailuan Clean Coal soared 9.9%.
Among banks, Shanghai Pudong Development Bank advanced 2.6% after it reported a 153% year-over-year increase in third-quarter net profit rose. China Merchants Bank rose 3.8% after it reporting a third-quarter net profit growth of 49% on year-over-year basis. The growth is sharply lower than the 116% increase that it posted in the first half. Bank of China gained 1.3% thouh its third-quarter net profit growth slowed to 11.5% on year to 17.8 billion yuan.
Elsewhere in the financial sector, Ping An Insurance rose by 10% daily limit, while China Life Insurance advanced 3.8%.
Brokerages rebounded after the official Xinhua news agency reported late Wednesday that China is proceeding with its plans to introduce margin trading and short selling, rejecting an earlier report that plans for short selling have been put on hold. CITIC Securities climbed 3.5% and Changjiang Securities added 1.7%.
Property stocks got a boost following the rate cut. China Vanke gained 1.0% and China Merchants Property Development jumped 4.7%.
Elsewhere:
In Seoul, the Kospi soared 12% to 1,084.72.
Singapore's Straits Times Index surged 7.8% to 1,801.91.
Taiwan's Taiex jumped 6.3% to 4,583.64.
Australia's S&P/ASX 200 rose 4% to 4,001.10.
New Zealand's NZX 50 index advanced 0.6% to 2,762.82.
with files from other wire services
