Asia stocks rise as China growth forecast upgraded
Jeremiah MarquezAsian stocks recovered Wednesday after two days of losses as the World Bank raised its growth forecast for China's economy and stronger commodities prices lifted the region's powerhouse resource companies. European markets were higher.
Every major Asian market traded in the green, with Hong Kong, South Korean and Indian shares leading the way with gains of about 2 percent. Oil prices traded near $80 a barrel, while the dollar gained against the yen and fell against the euro.
Sentiment was helped by more optimism about China as the World Bank boosted its forecast for the world's third-largest economy this year from 7.2 percent to 8.4 percent, reflecting the country's enormous stimulus measures.
The strength of China's rebound also led the Washington-based bank to increase its growth forecast for developing East Asia by 1.3 percentage points to 6.7 percent.
Markets have become more choppy in recent days amid growing worries about the scope of the U.S. economic recovery and durability of this year's stock rally.
But some analysts say tremendous liquidity brought about by looser government policies around the world could continue to underpin stock prices.
"It doesn't matter so much about the fundamentals at the moment," said Ben Pedley, Hong Kong-based managing director of LGT Investment Management Ltd. "Zero interest rates mean the money has to go somewhere. At least for now, we can defy gravity for a bit longer."
As trading got underway in Europe, France's CAC-40 was up 0.9 percent, Germany's DAX advanced 1.1 percent, and Britain's FTSE 100 rose 0.5 percent.
Earlier in Asia, Japan's Nikkei 225 stock average added 41.36 points, or 0.4 percent, to 9,844.31 after the local financial markets were closed Tuesday for a national holiday. Hong Kong's Hang Seng climbed 374.71 points, or 1.8 percent, to 21,614.77, South Korea's Kospi added 1.9 percent to 1,579.93 and India's Sensex was higher by 2.1 percent at 15,735.14.
Elsewhere, Shanghai's index traded up 0.5 percent and Taiwan's market was 2 percent higher.
Gold, meanwhile, reached a new high of $1,090.6 an ounce following a sharp rise overnight. The precious metal jumped to $1,087 an ounce Tuesday after India's central bank bought $6.7 billion worth of gold — 200 metric tons in all — from the the International Monetary Fund.
The news lifted gold companies across Asia. China's leading gold producer, Zijin Mining, shined with a 5 percent gain in Hong Kong, while Japan's Sumitomo Metal Mining Co. climbed 2.6 percent.
Wall Street traded largely sideways in a volatile session Tuesday.
The Dow fell 17.53, or 0.2 percent, to 9,771.91, after being down as much as 86 points. The broader Standard & Poor's 500 index rose 2.53, or 0.2 percent, to 1,045.41.
U.S. futures pointed to a modestly higher open on Wall Street Wednesday. Dow futures were up 39, or 0.4 percent, at 9,756 and S&P futures gained 4.6, or 0.4 percent, to 1,046.30.
Oil prices floundered in Asia before extending a sharp overnight rise. Benchmark crude for December delivery was up 16 cents to $79.76 a barrel. The contract gained $1.47 overnight.
Gold, meanwhile, was mostly flat at $1,084 an ounce after hitting a new high of $1,087 an ounce overnight.
The dollar ticked up to 90.63 yen from 90.30 yen. The euro was higher at $1.4755 from $1.4717.