Asia stocks rise as China growth buoys confidence
HONG KONG: Asian stocks jumped Thursday after China's economic growth quickened and U.S. companies posted stronger-than-expected results, boosting faith in a global recovery.
The move higher followed a rally on Wall Street and marked the region's third straight day of gains after a string of losses amid anxiety the market had overestimated the economy's prospects and earnings season would disappoint.
But worst-case fears about U.S. earnings haven't played out, at least not yet.
Intel Corp., the world's biggest chipmaker, helped confidence by posting better-than-expected results and a robust forecast for the second-half of the year. The news came after Goldman Sach Group Inc.'s quarterly profit comforted investors.
Adding to the growth story, China said its economy accelerated in the second quarter, expanding by 7.9 percent, amid a surge in consumer spending and factory output on the back of massive government stimulus measures.
Analysts said the quicker expansion, above most market forecasts, put the world's third-largest economy within reach of the government's 8 percent full-year growth target.
"This should give people confidence that China's economy is on strong footing and that there are a lot better days ahead," said Alan Landau, Hong Kong-based president of Marco Polo Pure Asset Management, which oversees about $120 million in mostly mainland Chinese equities.
"All the signs point to expansion in China. Sentiment is very positive toward China. Where else in the world right now can you find that kind of growth?"
Every major benchmark was green, though many traded off their highs by the afternoon as caution began to set in after U.S. market futures dropped and struggling U.S. lender CIT Group Inc. headed for bankruptcy.
Japan's Nikkei 225 stock average gained 74.91 points, or 0.8 percent, to 9,344.16 and Hong Kong's Hang Seng was up 294.91 points, or 1.6 percent, at 18553.57.
South Korea's Kospi added 0.8 percent to 1,432.22. Australia's index advanced 1.8 percent, India's Sensex was flat and Singapore's stock measure was higher by 0.8 percent.
In mainland China, the Shanghai benchmark gained 0.8 percent to 3,212.60.
On Wall Street Wednesday, the Dow jumped 256.72, or 3.1 percent, to 8,616.21, its biggest gain since March 23.
The Standard & Poor's 500 index rose 26.84, or 3 percent, to 932.68, while the technology-laden Nasdaq composite index gained 63.17, or 3.5 percent, to 1,862.90, responding to Intel's news.
U.S. futures pointed to losses Thursday, however. Dow futures were down 35, or 0.4 percent, at 8,508 and S&P futures were off 4.1, or 0.4 percent, at 923.10.
Oil prices were steady in Asian trade, with benchmark crude for August delivery up 8 cents at $61.62 a barrel. The contract surged $2.02 overnight, taking its cue from Wall Street.
The dollar weakened to 93.86 yen from 94.23 yen. The euro fell to $1.4081 from $1.4099.