Asian stocks rise sharply on recovery signs
HONG KONG: Asian stock markets jumped Tuesday as investors welcomed better-than-expected news about U.S. housing and banks as another sign the world economy was headed for recovery.
Tokyo and Hong Hong indexes added 3 percent in one of the region's strongest performances in days. Financials helped lead the way after American banks lifted Wall Street overnight, while oil companies were higher on the back of stronger crude prices.
Investor's appetite for risk returned as they latched onto some reassuring signals from the two U.S. industries at the heart of the economic crisis: housing and financials. Lowe's home improvement chain posted upbeat results, homebuilder confidence rose and analysts issued rosy comments about banks, suggesting a recession in the world's largest economy was easing.
The news also lent more support to the market narrative about economic recovery that has helped drive massive amounts of hot money into equities in recent weeks, said Andrew Orchard, Asia strategist for Royal Bank of Scotland in Hong Kong.
"I'm still not convinced of a longer-term recovery, although I do think this rally can continue for several months," Orchard said. "As the markets continue to pick up, more people have to invest, whether they believe in the recovery or not."
Japan's Nikkei 225 stock average rose 266.96 points, or 3 percent, to 9,305.65, with some investors cautious ahead of the release of gross domestic product data on Wednesday. Hong Kong's Hang Seng climbed 515.78, or 3 percent, to 17,538.69. South Korea's Kospi was up 2.9 percent at 1,427.31.
In India, where stocks surged 17 percent the day before after the results of national elections, the Sensex added another 1 percent to 14,417.87. The Shanghai index gained 0.7 percent, Australia's stock measure was 2.2 percent higher and Taiwan's market rose 1.2 percent.
Asian markets, as is often the case, took their direction from Wall Street,
Overnight in New York, investors pushed the Dow up 235.44, or 2.9 percent, to 8,504.08 — the biggest point gain since a 246-point jump on April 9.
The S&P 500 index rose 26.83, or 3 percent, to 909.71, putting it back into positive territory for the year.
U.S. futures pointed to a mixed session on Wall Street Tuesday. Dow futures were down 6 points, or 0.1 percent, at 8,464 and S&P futures were up 1.8, or 0.2 percent, at 908.90.
The stock market's advance also buoyed oil prices, with benchmark crude for June delivery rising 79 cents to $59.82 in Asian trade. On Monday, the contract jumped $2.69 to settle at $59.03.
In currencies, the dollar gained to 96.45 yen from 96.36 yen, while the euro edged up to $1.3569 from $1.3554.