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Asia stocks higher as sentiment improves; Nikkei ends up 0.4%

Published 12/05/2012, 02:43 AM
Updated 12/05/2012, 02:43 AM
Investing.com - Asian stock markets were broadly higher during late Asian trade on Wednesday, with markets in Hong Kong and mainland China outperforming after comments from Communist Party chief Xi Jinping fuelled hopes for more stimulus measures in Asia’s largest economy.

During late Asian trade, Hong Kong's Hang Seng Index surged 2.1%, Australia’s ASX/200 Index settled 0.4% higher, while Japan’s Nikkei 225 Index ended up 0.4%.

Comments from a meeting of China’s new leaders Tuesday, the first following November’s leadership handover, implied that supportive economic policy would remain in place in China.

Party chief Xi Jinping said that policy makers would continue fine-tuning fiscal and monetary policies to ensure stable growth.

The comments sparked a wave of buying in Shanghai, where markets rallied 3% to come off a four-year closing low hit in the previous session. Shares in Hong Kong benefitted from the upbeat market environment.

The China banking and insurance sector were among the biggest gainers on the index, with Ping An and China Life Insurance climbing 5.8% and 4.5%, while China Construction Bank shares rose 2.9% and Industrial and Commercial Bank of China added 2.3%.

Property developers also contributed to gains, with Sino Land shares up 2.2% and Sun Hung Kai rising 1.1%.

Meanwhile, in Tokyo, the Nikkei climbed to a seven-month closing high, as exporters advanced on the back of a weakening yen.

The Nikkei has rallied nearly 9.5% in the past three weeks, with exporters amongst the most notable gainers, as ongoing weakness in the yen boosted the outlook for export earnings.

The yen has been weighed by speculation the country’s main opposition leader, Liberal Democratic Party leader Shinzo Abe will win the upcoming general election on December 16.

Abe said recently that the Bank of Japan should employ unlimited monetary easing until inflation reaches 2%.

Troubled electronics maker Sharp saw shares jump 4% after it announced an investment of up to $120 million from Qualcomm.

Index heavyweight Fast Retailing tacked on 3% after reporting same-store sales for its Uniqlo clothing chain in Japan rose 13.7% in November.

Elsewhere, in Australia, the benchmark ASX/200 Index was pulled higher by gains in lenders, which rose a day after the Reserve Bank of Australia lowered its benchmark interest rate to the lowest level since the 2009 global financial crisis.

The RBA on Tuesday cut its benchmark interest rate to 3% from 3.25%, in line with market expectations.

The big four banks all rose, with Australia's top lender, the Commonwealth Bank of Australia climbing the most, up 1%.

Looking ahead, European stock market futures pointed to a higher open. The EURO STOXX 50 futures pointed to a gain of 0.6% at the open, France’s CAC 40 futures added 0.6%, London’s FTSE 100 futures eased up 0.4%, while Germany's DAX futures pointed to a gain of 0.5% at the open.

Later in the day, the euro zone was to release official data on retail sales, while Spain was to hold an auction of 10-year government bonds.

The U.S. was to release a report on ADP nonfarm payrolls, as well as official data on factory orders and crude oil stockpiles. In addition, the Institute of Supply Management was to produce a report on service sector activity.

Investors also remained concerned over the looming fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.

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