Asian stocks rise after US economy report – Trading Room

HONG KONG, Sept 5 AFP

September 05 2013, 6:54PM

Asian markets have mostly risen, following an upbeat Federal Reserve report on the US economy and positive European growth data, but gains were capped by profit-taking and lingering concerns over Syria.

While a positive outlook has lifted sentiment, helping the US dollar rise above Y100, traders remain on edge about the Fed’s plans for its stimulus program, with concerns it will soon start a wind-down.

Tokyo on Thursday closed flat, edging up 10.95 points to 14,064.82, with little reaction after the Bank of Japan upgraded its assessment of the world’s No.3 economy. Seoul finished up 0.96 per cent, or 18.62 points, at 1,951.65, while Hong Kong rose 1.22 per cent, or 271.75 points, to 22,597.97.

Sydney slipped 0.37 per cent, or 19.1 points, to 5,142.5 while Shanghai was down 0.24 per cent, giving up 5.19 points to 2,122.43.

The Fed’s Beige Book report into the state of the world’s top economy showed consumer spending and manufacturing has risen in most of the 12 regions in the US while job creation was steady or improving.

“The US Fed’s Beige Book was reassuring for investors who continue to harbour doubts about the pace and quality of the economic recovery,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

Wednesday’s study came out a day after data showed US manufacturing activity had picked up pace in August.

On Wall Street, the Dow rose 0.65 per cent, the S&P 500 added 0.81 per cent and the Nasdaq climbed 1.01 per cent. US shares were given an extra boost after a strong set of auto sales for August.

However, economists fear for emerging markets as the results will provide the Fed with more evidence the US economy can stand on its own and does not need the vast stimulus that has been in place since September last year.

Expectations of an end to the Fed’s bond-buying has seen foreigners pull their cash out of emerging markets as they repatriate to the West where investments look safer and more rewarding.

Global markets rallied at the start of the week after a batch of results around the world, including manufacturing data from China and Europe, which showed activity sharply higher.

And on Wednesday figures confirmed the eurozone had emerged from an 18-month recession in the second quarter, providing fresh evidence it is slowly putting its long-running debt crisis behind it.

The Eurostat statistics agency said in its second estimate that the 17-nation bloc grew 0.3 per cent in the three months to June, with a contraction of 0.2 per cent in the first quarter.

In currency trade, the US dollar broke past Y100 for the first time since July, sitting at Y100.07, compared with Y99.74 in New York on Wednesday.

The euro bought $US1.3175 and Y131.67 compared with $US1.3204 and Y131.70.

However, investors were broadly unmoved by the Bank of Japan’s decision to hold pat on any new measures to boost the economy.

Trade remains edgy with dealers keeping an eye on the Syria crisis as US President Barack Obama tries to win backing from congress for a military strike on the Assad regime after its alleged use of chemical weapons.

Obama cleared the first hurdle on Wednesday as a key senate panel gave its backing to the White House’s plan for a limited response. The president hopes to get approval from legislators in a vote next week.

On oil markets New York’s main contract, West Texas Intermediate for delivery in October, gained 59 US cents to $US107.82, while Brent North Sea crude for October gained 26 US cents to $US115.27.

Gold cost $US1,387.97 an ounce at 1800 AEST, up from $US1,402.57 late on Wednesday.

In other markets:

– Taipei ended 1.06 per cent, or 85.66 points, higher at 8,169.1.

Taiwan Semiconductor Manufacturing Co. rose 1.0 per cent to $Tw101.5 while HTC fell 4.73 per cent to $Tw131.0.

– Manila closed 0.15 per cent lower, giving up 9.11 points to 5,959.22.

Philippine Long Distance Telephone slipped 0.14 per cent to 2,786 pesos, while Ayala Land fell 2.72 per cent to 25 pesos but SM Investments climbed 0.15 per cent to 682 pesos.

– Wellington slipped 0.13 per cent, or 5.96 points, to 4,604.35.

Fletcher Building closed down 0.1 per cent at $NZ9.41 and Telecom was 1.5 per cent lower at $NZ2.21 while Air New Zealand was up 1.06 per cent at $NZ1.43.