Japan's Nikkei index leads global stocks higher
AP and AFPBANGKOK/HONG KONG -- Japan's Nikkei stock index posted solid gains Tuesday on hopes for more monetary stimulus and helped pull markets up elsewhere.
August 14, 2013, 12:00 am TWN
In early European trading, Britain's FTSE 100 rose 0.6 percent to 6,616.35. Germany's DAX advanced 0.9 percent to 8,430.83. France's CAC-40 added 0.4 percent to 4,087.06.
Wall Street futures also headed higher, with Dow Jones industrial futures up 0.4 percent to 15,445. S&P 500 futures gained 0.4 percent to 1,693.20.
Australia's S&P/ASX 200 gained 1 percent to 5,157.70 as investors geared up for company earnings season. Mining services companies rose. Bradken Ltd. surged more than 12 percent after the engineering company said it would reduce costs and spending following a steep fall in full year profit.
Despite rising commodities prices, some Australian mining stocks fell as investors sold off shares that have enjoyed recent gains, said Stan Shamu, market strategist at IG in Melbourne, Australia. Newcrest Mining Ltd. dropped 2.3 percent a day after surging nearly 8 percent.
“We are getting a little bit of profit-taking after a pretty big run in miners,” Shamu said.
Meanwhile in Asia, economists had expected to see more than an annualized growth rate of 2.6 percent for the April-June quarter, given the size of the Bank of Japan's stimulus program and public spending called for under “Abenomics,” the aggressive program undertaken by Prime Minister Shinzo Abe to jumpstart the moribund economy.
By Tuesday, however, analysts saw the glass as half full. Disappointing data meant it was more likely that the Bank of Japan (BOJ) might step up its already massive government bond buying program.
The BOJ is expanding the monetary base by about 60 trillion yen (US$606 billion) to 70 trillion yen (US$707 billion) over two years by mopping up Japanese government bonds.
“Fading expectations of more aggressive monetary easing by the Bank of Japan have been perhaps the most important factor behind the recent partial recovery in the yen and associated weakness in the Nikkei,” said analysts at Capital Economics in a market commentary.
“However, we continue to expect Japan's central bank to step up its asset purchases,” Capital Economics said.
Tokyo jumped 2.57 percent by the close after slipping on Monday following disappointing Japanese growth figures.
Seoul ended up 1.5 percent, or 28.20 points at 1,913.03, while Sydney closed up 0.96 percent, or 49.0 points at 5157.7.
Hong Kong closed up 1.21 percent, or 269.85 points at 22,541.13, with investors still broadly bolstered by last week's positive indicators pointing to stability in the region's largest economy.