Thu, Feb 03, 2011 - Page 5 News List

Easing Egypt fears, Dow surge boost Asian stocks

GAINING STRENGTH:Hosni Mubarak’s pledge to step down sent dealers back into stocks as the Dow Jones industrial average closed Tuesday above 12,000 points

AFP, HONG KONG

Asian stocks jumped yesterday after the Dow closed at a two-and-a-half-year high on the back of data indicating the US economy is gaining strength, while easing tensions in Egypt added to sentiment.

Tokyo’s Nikkei surged 1.78 percent, or 182.86 points, to end at 10,457.36 and Sydney closed 0.93 percent, or 44.4 points, higher at 4,796.5.

Hong Kong ended 1.81 percent, or 426.01 points, higher at 23,908.96. The Hong Kong market was open for just half a day due to the Lunar New Year holidays.

Taipei, Shanghai and Seoul were closed.

Regional markets were bullish from the opening bell after the Dow on Tuesday rose 1.25 percent to finish above the psychologically key 12,000-point mark for the first time since June 2008.

The broader S&P 500 index jumped 1.67 percent and the tech-heavy NASDAQ rose 1.89 percent.

US dealers sent the markets surging on the back of economic data showing manufacturing was growing at its fastest rate since 2004 and car sales were also strong, along with solid earnings from leading firms including Pfizer and UPS.

Fears about unrest in Egypt eased late on Tuesday after Egyptian President Hosni Mubarak said he would step down after elections. The announcement pushed dealers back into stocks after a sell-off earlier this week caused by tensions in the region.

“There’s been a global alignment in terms of positive economic data and also some good corporate reporting out of the US,” Macquarie Private Wealth client adviser Marcus Droga in Sydney said.

“Obviously the Middle East is still a potential concern, but that’s cooled for the time being,” he told Dow Jones Newswires.

Eyes will be on the release of key US jobs figures late tomorrow, which will give a better insight into the state of the world’s biggest economy.

Despite the news out of Cairo, oil traders were still on edge and crude remained above US$100 a barrel.

Brent North Sea crude, for delivery in March, rose US$0.16 to US$101.90, while New York’s main contract, light sweet crude for March, was was down US$0.02 at US$90.75.

On forex markets the euro benefited from the increased risk appetite as well as expectations the European Central Bank will raise interest rates soon as European countries begin to struggle with inflation.

The euro bought US$1.3850 in early Tokyo trading — a three-month high — up from US$1.3831 in New York late on Tuesday, while it was trading at ¥112.85 compared with ¥112.47.

The US dollar stood at ¥81.47, up from ¥81.33 on Thursday in New York.

Gold closed at US$1,340.70 to US$1,341.70 an ounce in Hong Kong, up from Tuesday’s close of US$1,338.50 to US$1,339.50.

In other markets, Singapore rose 0.83 percent, or 26.38 points, to 3,211.12 and Manila closed 1.58 percent, or 60.58 points, higher at 3,891.07. Wellington gained 0.11 percent, or 3.84 points, to close at 3,352.30, while Kuala Lumpur rose 0.78 percent, or 11.88 points, to 1,531.82.

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