Asian markets extend gains on US housing data

Saturday, 4 December 2010 00:01 -     - {{hitsCtrl.values.hits}}

HONG KONG, (AFP) - Most Asian stocks extended gains Friday from the previous day as a fresh batch of US economic figures added to the impression that the world’s biggest economy is on the right track to recovery.

A decision by the European Central Bank (ECB) to continue buying government bonds also provided a break from lingering concerns over the eurozone debt crisis, while the single currency held its own against major currencies.

Sydney added 0.38 percent, or 18 points, to end at 4,694.2 and Tokyo rose 0.10 percent, or 9.80 points, to close on 10,178.32, while Hong Kong was 0.13 percent higher by the break and Singapore added 0.20 percent.

Shanghai was down 0.51 percent in the afternoon on profit-taking.

The second straight day of gains followed another robust day on Wall Street, where the Dow rose 0.95 percent, the S&P 500 advanced 1.28 percent and the Nasdaq gained 1.17 percent.

Traders welcomed news that the National Association of Realtors had reported pending home sales jumped 10.4 percent in October, much more than expected, offering a glimmer of hope to the troubled US housing market.

That was coupled with US retailers and department stores saying sales were overall stronger than anticipated in November, stoking hopes for the key holiday shopping season.

“Global markets continued to look to the bright side overnight as investors began to grow more optimistic about the US economic recovery with concerns over European debt woes taking a much needed reprieve,” said Chris Go, sales trader at GoMarkets in Melbourne.

“It’s all about holiday sales in the US and positivity surrounding the robust start to the holiday season and a generally more upbeat mood on the jobs front is providing some relief for market participants.”Dealers were looking to Friday’s release of non-farm payrolls in the United States, which will give a clearer sign of the state of the economy.

The rallies came as welcome relief from the eurozone crisis, where investors fear several countries including Portugal and Spain might have to follow Ireland and Greece and seek a bailout to help repay their debts.

Those concerns were dampened on Thursday when the ECB said it would keep lending rates at one percent and continue to buy government bonds while also offering banks cheap emergency funding in a bid to boost the lagging economy.

Traders said the ECB had stepped up buying stressed eurozone government bonds.

“It’s a boost to equity markets that Japan, the United States and Europe have now all decided to continue their easing measures,” Okasan Securities strategist Hideyuki Ishiguro told Dow Jones Newswires.

The euro edged down to 1.3207 dollars in Tokyo from 1.3220 in New York late Thursday, but well up from the 1.2985 level seen on Tuesday.

It also eased to 110.46 yen from 110.85 yen in New York late Thursday.

The dollar was trading at 83.66 yen compared with 83.84 yen in New York.

Oil prices slid after hitting three-week highs on the back of upbeat US data and a cold snap across Europe. New York’s main contract, light sweet crude for January delivery, fell 20 cents to 87.80 dollars a barrel in the afternoon.

Brent North Sea crude for January slipped 12 cents to 90.57 dollars.

Gold opened at 1,391.00-1,392.00 dollars an ounce in Hong Kong, down slightly from Thursday’s close of 1,392.50-1,393.50 dollars.

In other markets:

-- Seoul closed 0.36 percent, or 7.00 points, higher at 1,957.26.

The market was given a boost by Samsung Electronics, which gained 4.07 percent after it announced Jay Y. Lee, the chairman’s son, had been appointed president.