Asian Markets - Asian Markets Spurred by Wall Street Gains

Asian Markets Spurred by Wall Street Gains

Asian markets rallied on the back of Wall Street's surge. Japanese shares extended gains on exporters, while resource stocks in Sydney and Hong Kong rose amid high commodity prices and talk that BHP Billiton could be renewing a takeover effort for Rio Tinto.

On Wall Street the stocks rallied on Wednesday, with the Dow industrials posting a 256-point advance, as upbeat results from technology bellwether Intel Corp. and financial giant J.P. Morgan Chase raised hopes that corporate profits can weather a U.S. economic downturn.

Chinese stocks continued to be volatile after the central bank Wednesday increased banks' reserve requirement by half a percentage point to 16%, in attempt to cool inflation. The People Bank of China responded soon after data showed China's March inflation rose 8.3% from the year-ago month. The Shanghai Composite recently plunged 2.1% to 3,222.74, after rising as high as 3,352.95 earlier in the day.

Japan's Nikkei 225 Average climbed 1.9% to 13,398.30 and the broader Topix index added 1.7% to 1,293.32, with both extending their advance into a third session. On the economic front the industrial output for February was revised higher than initial intimates reported about two weeks ago. The Ministry of Economy, Trade and Industry said industrial output rose a revised 1.6% on month in February, compared with a 0.9% increase in the preliminary data. Inventories, meanwhile, climbed 0.1% on month, down from a 0.2% increase in the initial data.

In Hong Kong, the Hang Seng Index gained 1.6% to 24,258.96, while the Hang Seng China Enterprises Index soared 2.3% to 12,887.76. Meanwhile the unemployment rate during the January-March period stood at 3.4 %, up slightly from 3.3 % in December-February, the government said. The previous reading of 3.3 % was the lowest since January-March 1998.

In Sydney, the S&P/ASX 200 advanced 0.9% to 5,519, taking gains into a third session. Meanwhile according to the data released by Australian Bureau of Statistics Australian merchandise imports rose 1.0% in March from February in seasonally adjusted terms. In original terms, the total value of imports in March was A$16.76 billion, up from A$16.64 billion in February.

In the afternoon trading India's Sensitive Index, or Sensex, rose 1.6% to 16,496.02 and the broader S&P/CNX Nifty rose 1.5% to 4,959.20. Singapore's Straits Times Index added 1.4% to 3,130.52.

Elsewhere, South Korea's Kospi climbed 0.7% to 1,768.67 and New Zealand's NZX 50 index rose 1.5% to 3,568.94. Taiwan's weighted index inched up 0.3% to 9,090.43.

May crude-oil futures slipped as much as 5 cents to $114.88 a barrel in electronic trading. The contract hit a record of $115.07 a barrel on Nymex overnight before finishing at $114.93. June gold futures slipped $1.10 to $947.20 an ounce in electronic trading, after finishing up $16.30 at $948.30 an ounce on the Nymex.

In Asian currency trading, the U.S. dollar bought 102.06 yen, compared with 101.82 yen in New York late Wednesday.

Shares in Europe edge higher, attempting to build on strong gains made in the previous session, amid hopes that first-quarter earnings from companies on both sides of the Atlantic won't be as bad as expected

In National indices, the U.K. FTSE 100 index rose 0.3% to 6,065.70, the German DAX 30 index climbed 0.4% to 6,728.69 and the French CAC-40 index advanced 0.5% to 4,880.95.

On the economic release side the European Central Bank confirmed the short term price pressure and temporarily high inflation rates may be prolonged.

As per the bulletins editorial the high inflation rates are mainly due to energy and food prices, the ECB added. The bulletin follows Wednesday's euro-zone annual March inflation figure of 3.6%, which was revised up from a preliminary estimate of 3.5%.

ECB officials have repeatedly expressed concern about current high inflation levels spilling over into wage- and price-setting behavior, causing a second round of inflation.

The current monetary policy stance will help to achieve the ECB's objective of maintaining price stability, the bulletin's editorial said. Economic fundamentals in the euro zone are sound, and macroeconomic indicators point to moderate but ongoing growth, the editorial said.

The ECB bulletin's editorial largely reiterates comments by ECB President Jean-Claude Trichet at a press conference last week, following the council's decision to keep its policy rate at 4.00%.

However, the ECB noted that uncertainty resulting from financial market turmoil remains unusually high, and tensions may last longer than initially expected, as Trichet said last week. There is also a risk that this tension could have a broader than expected impact on the real economy, the editorial repeated.

Looking ahead for the day we have Construction output and Trade balance for Euro zone followed by Inflation data from Canada. In the evening we have Continuous Jobless Claims and Initial Jobless Claims for US followed by Leading economic indicator and Fed Manufacturing Survey.