Most Asian markets rose Thursday as a record finish for key U.S. indexes and hopes for Japanese central-bank easing lifted sentiment, while Chinese stocks climbed after a boost in bank lending and expectations for lower corporate taxes.
The Nikkei Stock Average ended 2% higher at 13,549.16, a level it hasn’t seen since July 2008. The benchmark emded higher for the sixth time in seven trading days, with the U.S. dollar remaining just short of the key ¥100 level.
“Aggressive easing by the Bank of Japan has been rapidly priced by global rates markets, as investors search for yield. However, global equities are only starting to price the [Bank of Japan] actions as ‘risk on,’” said Barclays analyst Guillermo Felices.
“The current environment remains pro-equities, and even if differentiation across regions and sectors may persist, we expect global equities to rally further,” Felices said.
Elsewhere, Australia’s S&P/ASX 200 ended 0.8% higher and South Korea’s Kospi overcame intraday losses to finish 0.7% higher, while Hong Kong’s Hang Seng Index gained 0.4% in afternoon trading.
The Shanghai Composite was one major exception to the broader trend, ending 0.3%.
The broad advances in Asia came after the Dow Jones Industrial Average and the S&P 500 both ended at record levels overnight on Wall Street. U.S. equity index futures were mixed by late afternoon in Asia, with the DJIA futures up 0.1%, the S&P 500 futures flat and the Nasdaq 100 futures off 0.1%.
In Tokyo, the rally was spread across sectors, with exporters, financials and industrial shares again among the gainers.
Shares of Mazda Motor Corp. improved by 4%, Mitsubishi Heavy Industries Ltd. jumped 10.3%, and banking giant Mitsubishi UFJ Financial Group Inc. climbing 2.6%.
Sharp Corp. soared 7.9% after a Nikkei news report that the company will post an October-March operating profit well above forecasts, thanks to payroll cuts and increased sales of LCD panels.
The advances in Hong Kong and Shanghai came after data released by the People’s Bank of China\ showed the country’s financial institutions extended 1.06 trillion yuan ($171 billion) credit in March, sharply higher than the 620 billion yuan in loans they made in February.
Hopes for tax reforms also aided market sentiment, after the State Council — China’s cabinet — on Wednesday decided to implement nationwide a pilot program that replaces a tax on overall sales with a value-added tax, Xinhua news reported. The move is expected to reduce the tax burden on businesses.
Shares of Aluminum Corp. of China Ltd., or Chalco, added 2.3%, Bank of Communications Co. rose 1.6% and personal-hygiene products maker Hengan International Group Co. advanced 2.8% to lead a broad-based rally in Hong Kong.
In Shanghai, shares of China Eastern Airlines Corp. climbed 2% after receiving the industry regulator’s approval to raise funds by issuing new yuan-denominated shares. But metals producers retreated after rallying earlier in the week, with Chalco losing 2.8% and Jiangxi Copper Co. shedding 1.6%.
In Seoul, construction-related and industrial stocks suffered deep losses after the Bank of Korea surprised markets by refraining from a widely expected interest-rate cut.
Hyundai Engineering & Construction Co. slumped 5.2%, Kumho Industrial Co. dropped 4.1% and auto giant Hyundai Motor Co. lost 0.3%.
But a 1.3% advance for heavyweight Samsung Electronics Co. , along with broad gains for the financial sector, helped the market rebound from early losses.
Australian shares, led by gains in banks and retailers, managed to end higher despite unexpectedly weak official jobs data. Commonwealth Bank of Australia rose 1.1% and Woolworths Ltd. added 1.4%, with Woolworths getting an extra lift from a quarterly gain in same-store sales.
Marketwatch
