SINGAPORE: Asian stocks were up in early trade Thursday
after the US Federal Reserve raised key interest rates for the first
time in nearly a decade, underscoring its confidence in the health of
the world's top economy.
Japan’s Nikkei 225 index at the Tokyo Stock Exchange jumped 2.15 percent, or 409.67 points, to 19,459.58 in early deals, after surging 2.61 percent a day earlier.
The broad-based Topix index of all first-section shares surged 2.04 percent, or 31.38 points, to 1,572.10.
Hong Kong stocks rose soon after opening, with the Hang Seng Index in Hong Kong adding 0.64 percent, or 139.88 points, to 21,841.09.
In Shanghai the benchmark composite index added 0.50 percent, or 17.44 points, to 3,533.63, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 0.62 percent, or 14.08 points, to 2,294.20.
Taiwan stocks rose 1 percent, led by gains in banks and technology exporters.
As of 1:12 GMT, the main TAIEX index was up 0.96 percent at 8,262.91, after closing 1.4 percent higher at 8,184.66 in the previous session.
The electronics subindex jumped 1 percent, while the financials subindex gained 1.6 percent.
The landmark decision ended months of speculation over whether the Fed would go ahead with a small increase in borrowing costs and reflected the central bank's growing confidence in the US economy -- a major market for Japanese firms.
"This action marks the end of an extraordinary seven-year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression," Fed chair Janet Yellen told a news conference.
The long-awaited move boosted the dollar against the yen, which is a plus for the profitability of Japanese companies doing business abroad.
The three main US equity indexes finished firmly higher Wednesday after the news and as the Fed promised a gradual approach to future rate hikes.
The Dow jumped 1.28 percent, while the S&P 500 rose 1.45 percent, and the Nasdaq advanced 1.52 percent.
"The first (US rate hike) is at least over. That's a relief," Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank, told Bloomberg News.
"The domestic situation in the US looks good, and if the US is strong, that's positive for Japan."
The Fed raised the benchmark federal funds rate, locked near zero since the global financial crisis, by a quarter point to 0.25-0.50 percent, saying the economy is growing at a moderate pace and should accelerate next year.
"What is clear is that equity markets are taking the rate hike as a positive," said IG Markets analyst Angus Nicholson.
"The fact that the Fed were able to hike rates indicates that the US economy has finally developed enough upward momentum to withstand higher interest rates," he added.
The move was widely expected and marked the end of an era in which the Fed pumped trillions of cheap dollars into the devastated US economy to fuel what turned out to be an unexpectedly long rebound.
POSITIVES DOWN UNDER
Australian shares jumped 1.4 percent, joining in a global equities rally as investors welcomed the decision.
The S&P/ASX 200 index rose 67.95 points to 5,096.4 by 0106 GMT. The benchmark rose 1.9 percent on Wednesday after previously bouncing off a 2-1/2 year low.
"We've seen a real expression of confidence in the world's largest economy," said Michael McCarthy, Chief market Strategist, CMC Markets.
"If we are to have a Santa rally on average it starts on the 15th December, we might have started one day late but it does look like we've got positive momentum heading into year end."
The major banks rallied with Westpac Bank and National Australia Bank each gaining over 2 percent, while Commonwealth Bank rose 1.7 percent and ANZ Bank up 1.8 percent.
The upbeat mood also drove gold miners higher with Newcrest Mining up 2.1 percent while Northern Star and Evolution jumped over 4.0 percent each.
Persistent worries about a supply glut in oil put pressure on energy stocks.
Santos fell down 1.5 percent and Woodside Petroleum was off 0.7 percent.
New Zealand's benchmark NZX 50 index was relatively flat, edging up 0.1 percent or 5.760 points to 6,076.700.
The subsidiares of Australian banks were among the biggest gainers with ANZ rising 2.6 percent and Westpac up 1.11 percent.
Fast food operator Restaurant Brand rose 0.9 percent after announcing sales for the company had risen in the third quarter.
Telecommunications infrastructure provider Chorus led losses, falling 2.6 percent as investors continued to take profits. The stock had soared 23.87 percent in the previous session on the news that New Zealand's competition regulator had decided the company could charge retail telecommunication companies more to access its infrastructure.
CURRENCY BOOST
Most emerging Asian currencies edged as investor risk appetite returned.
Indonesia's rupiah rose as traders covered short positions in the second-worst performing Asian currency of the year. The Thai baht gained with most government bond prices higher.
"The beat up currencies like IDR should do well since it's a risk-on environment with a major risk event out of the way," said Sean Yokota, head of Asia strategy for Scandinavian bank SEB in Singapore.
Still, analysts and traders doubted if emerging Asian currencies would appreciate further, given a weaker Chinese yuan and a rout in global oil prices.
"Asian FX strength will be capped though as you saw from CNY fixing moving higher again. China is comfortable letting the currency weaken and that caps major strength in Asian FX despite the risk-on sentiment," Yokota said, referring to moves in dollar/yuan.
The renminbi touched its weakest level since June 2011 after China's central bank set its daily guidance rate at a 4-1/2-year low.
The Singapore dollar lost ground, hit by data showing the city-state's exports in November unexpectedly fell on a decline in sales to China and Europe.
Japan’s Nikkei 225 index at the Tokyo Stock Exchange jumped 2.15 percent, or 409.67 points, to 19,459.58 in early deals, after surging 2.61 percent a day earlier.
The broad-based Topix index of all first-section shares surged 2.04 percent, or 31.38 points, to 1,572.10.
Hong Kong stocks rose soon after opening, with the Hang Seng Index in Hong Kong adding 0.64 percent, or 139.88 points, to 21,841.09.
In Shanghai the benchmark composite index added 0.50 percent, or 17.44 points, to 3,533.63, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 0.62 percent, or 14.08 points, to 2,294.20.
Taiwan stocks rose 1 percent, led by gains in banks and technology exporters.
As of 1:12 GMT, the main TAIEX index was up 0.96 percent at 8,262.91, after closing 1.4 percent higher at 8,184.66 in the previous session.
The electronics subindex jumped 1 percent, while the financials subindex gained 1.6 percent.
The landmark decision ended months of speculation over whether the Fed would go ahead with a small increase in borrowing costs and reflected the central bank's growing confidence in the US economy -- a major market for Japanese firms.
"This action marks the end of an extraordinary seven-year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression," Fed chair Janet Yellen told a news conference.
The long-awaited move boosted the dollar against the yen, which is a plus for the profitability of Japanese companies doing business abroad.
The three main US equity indexes finished firmly higher Wednesday after the news and as the Fed promised a gradual approach to future rate hikes.
The Dow jumped 1.28 percent, while the S&P 500 rose 1.45 percent, and the Nasdaq advanced 1.52 percent.
"The first (US rate hike) is at least over. That's a relief," Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank, told Bloomberg News.
"The domestic situation in the US looks good, and if the US is strong, that's positive for Japan."
The Fed raised the benchmark federal funds rate, locked near zero since the global financial crisis, by a quarter point to 0.25-0.50 percent, saying the economy is growing at a moderate pace and should accelerate next year.
"What is clear is that equity markets are taking the rate hike as a positive," said IG Markets analyst Angus Nicholson.
"The fact that the Fed were able to hike rates indicates that the US economy has finally developed enough upward momentum to withstand higher interest rates," he added.
The move was widely expected and marked the end of an era in which the Fed pumped trillions of cheap dollars into the devastated US economy to fuel what turned out to be an unexpectedly long rebound.
POSITIVES DOWN UNDER
Australian shares jumped 1.4 percent, joining in a global equities rally as investors welcomed the decision.
The S&P/ASX 200 index rose 67.95 points to 5,096.4 by 0106 GMT. The benchmark rose 1.9 percent on Wednesday after previously bouncing off a 2-1/2 year low.
"We've seen a real expression of confidence in the world's largest economy," said Michael McCarthy, Chief market Strategist, CMC Markets.
"If we are to have a Santa rally on average it starts on the 15th December, we might have started one day late but it does look like we've got positive momentum heading into year end."
The major banks rallied with Westpac Bank and National Australia Bank each gaining over 2 percent, while Commonwealth Bank rose 1.7 percent and ANZ Bank up 1.8 percent.
The upbeat mood also drove gold miners higher with Newcrest Mining up 2.1 percent while Northern Star and Evolution jumped over 4.0 percent each.
Persistent worries about a supply glut in oil put pressure on energy stocks.
Santos fell down 1.5 percent and Woodside Petroleum was off 0.7 percent.
New Zealand's benchmark NZX 50 index was relatively flat, edging up 0.1 percent or 5.760 points to 6,076.700.
The subsidiares of Australian banks were among the biggest gainers with ANZ rising 2.6 percent and Westpac up 1.11 percent.
Fast food operator Restaurant Brand rose 0.9 percent after announcing sales for the company had risen in the third quarter.
Telecommunications infrastructure provider Chorus led losses, falling 2.6 percent as investors continued to take profits. The stock had soared 23.87 percent in the previous session on the news that New Zealand's competition regulator had decided the company could charge retail telecommunication companies more to access its infrastructure.
CURRENCY BOOST
Most emerging Asian currencies edged as investor risk appetite returned.
Indonesia's rupiah rose as traders covered short positions in the second-worst performing Asian currency of the year. The Thai baht gained with most government bond prices higher.
"The beat up currencies like IDR should do well since it's a risk-on environment with a major risk event out of the way," said Sean Yokota, head of Asia strategy for Scandinavian bank SEB in Singapore.
Still, analysts and traders doubted if emerging Asian currencies would appreciate further, given a weaker Chinese yuan and a rout in global oil prices.
"Asian FX strength will be capped though as you saw from CNY fixing moving higher again. China is comfortable letting the currency weaken and that caps major strength in Asian FX despite the risk-on sentiment," Yokota said, referring to moves in dollar/yuan.
The renminbi touched its weakest level since June 2011 after China's central bank set its daily guidance rate at a 4-1/2-year low.
The Singapore dollar lost ground, hit by data showing the city-state's exports in November unexpectedly fell on a decline in sales to China and Europe.
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