Asian stocks bounced back Thursday after Federal Reserve Chairman Ben Bernanke stated U.S. interest rates will stay low to support economic recovery, with oil producers and gold miners displaying strong gains on an increase in commodity prices.
Mainland Chinese stocks led the jump on speculation Beijing may act to stabilize economic progress, with the Shanghai Composite Index boosting 3.2% on top of Wednesday’s 2.2% advance.
“I think emerging markets were doing pretty awfully. What we’re seeing is a reversion trade as a weaker dollar is net positive,” said Sunrise Brokers head of Asian equities Ben Collett. “In China, the markets are telling us that we are close to some sort of intervention.”
Meanwhile, Nomura economist Zhiwei Zhang wrote in a note to clients that the tone in a recent speech made by Premier Li Keqiang — in which he mentioned the need to stabilize growth — suggested Beijing’s policy stance may soften, according to a Dow Jones Newswires report.
Also showing solid gains, Hong Kong’s Hang Seng Index climbed 2.6%, and Australia’s S&P/ASX 200 surged 1%, while South Korea’s Kospi advanced 2% after the Bank of Korea left its policy interest rate unmoved.
Japanese shares turned volatile after the Bank of Japan cut its growth and inflation forecasts, and refrained from adding fresh stimulus, saying the domestic economy was starting to “recover moderately.” The Nikkei Stock Average climbed 0.3% after changing direction multiple times.
The performance in the regional stocks tracked an increase in U.S. equity index futures after Bernanke’s remarks, while the ICE dollar index tumbled.
“The reactions of the market are fairly intense to small Fed nuances, an indication of some fundamental instability or great uncertainty in the market,” said Société Générale currency strategist Sebastien Galy.
“‘Helicopter Ben’ is generally good for equities and bad for the U.S. dollar, so we have a good idea of the short-term reaction until we hit another bout of very decent U.S. data,” Galy said.
Resource stocks posted solid gains after commodity prices rallied overnight.
Among the region’s oil producers, Inpex Corp. bolstered 1.5% in Tokyo, Woodside Petroleum Ltd. increased with 1.6% in Sydney, and Cnooc Ltd. traded 4.6% more in Hong Kong and heavyweight PetroChina Co. boosted 2.7% in Shanghai.
The gains came as U.S. benchmark crude-oil futures stayed above $106 a barrel, after settling at their highest level in 15 months.
Gold miners were particularly strong after gold futures rose for a third straight day. Newcrest Mining Ltd. soared 11.5%, and Perseus Mining Ltd. surged 24.7% in Sydney, while Zijin Mining Group Co. stock rose 5.9% in Hong Kong and 3.1% in Shanghai.
Financials were among the biggest gainers on mainland bourses, with Haitong Securities Co. and China Minsheng Banking Corp. soaring by the day’s 10% limit in Shanghai, while Hong Yuan Securities Co. and Ping An Bank Co. also rose 10% in Shenzhen.
Property developers and financials also rallied in Hong Kong. Sun Hung Kai Properties Ltd. climbed 2.2%, and China Resources Land Ltd. soared 5.6%, while China Life Insurance Co. improved by 3.8%.
Hong Kong property developers tend to benefit from increased demand amid low interest rates in the U.S., given that rates in the territory — which pegs its currency to the U.S. dollar — move in lockstep with the federal funds rate.
Technology and steel shares jumped in Seoul, with heavyweight Samsung Electronics Co. rising 4.2%, and Hyundai Steel Co. climbing 5.2%.
In Tokyo, several exporters weakened on the yen’s strength, as the dollar lost hold of the ¥100 level and dropped as low as ¥98.23 after the Bank of Japan meeting outcome.
Toshiba Corp. relinquished 2.3%, Nikon Corp. gave up 3.8%, and Canon Inc. drifted 1.6% back.
