Asian shares fol­low Wall St higher af­ter China surge


Asian shares mainly rose on Tues­day, track­ing gains on Wall Street and fol­low­ing a surge in Shang­hai the pre­vi­ous day fu­elled by spec­u­la­tion China plans to over­haul its state-owned en­ter­prises.

Tokyo gained 0.54 per­cent at the open, Hong Kong climbed 1.11 per­cent and Seoul added 0.81 per­cent, while Syd­ney dipped 0.65 per­cent.

Shang­hai added 0.15 per­cent af­ter surg­ing Mon­day on news Bei­jing is mak­ing fresh moves to sup­port eq­ui­ties and hopes for an over­haul of the coun­try's in­ef­fi­cient gov­ern­ment-backed com­pa­nies. The rise in eq­ui­ties, which closed up al­most five per­cent, marked the broad­est rally in Chi­nese shares in history, an­a­lysts said, with only two out of some 1,400 listed com­pa­nies fall­ing. The news fol­lowed dis­ap­point­ing trade and in­fla­tion data from Asia's largest econ­omy over the week­end, which spurred hopes in some corners that Bei­jing will also un­leash fresh mon­e­tary stim­u­lus.

"One of the big­gest fears in the mar- ket­place is not so much the Fed, it's the slow­down in China," An­drew Bren­ner, head of in­ter­na­tional fixed in­come for Na­tional Al­liance Cap­i­tal Mar­kets, told Bloomberg News.

"If all of a sud­den peo­ple think the Chi­nese are go­ing to have se­ri­ous stim­u­lus, that's go­ing to turn things around."

Asian shares got a strong lead from Wall Street, where a rise in oil prices pro­pelled petroleum-linked stocks higher while news of a ma­jor ac­qui­si­tion by War­ren Buf­fett cheered deal­ers. Berk­shire Hath­away said it will buy Pre­ci­sion Cast­parts, a maker of com­plex me­tal com­po­nents for the aerospace, chem­i­cal pro­cess­ing and oil and gas in­dus­tries, for $37.2 bil­lion.

The Dow Jones In­dus­trial Av­er­age gained 1.39 per­cent, the broad-based S&P 500 jumped 1.28 per­cent, while the techrich Nas­daq Com­pos­ite In­dex ad­vanced 1.16 per­cent. But some in­vestors such as Tim Schroed­ers, a port­fo­lio man­ager at Pen­gana Cap­i­tal in Mel­bourne, warned the "cur­rent eu­pho­ria" in eq­ui­ties could be short-lived. "We're deal­ing with an in­creased like­li­hood that the Fed will start rais­ing rates in Septem­ber... How the mar­ket con­tends with that is prob­lem­atic," he told Bloomberg News.

Mar­ket ex­pec­ta­tions for a US rate rise next month were given a boost Fri­day by solid jobs data, but they were tem­pered by warn­ings from a cen­tral bank of­fi­cial that low in­fla­tion still poses a risk.

US Fed­eral Re­serve vice chair­man Stan­ley Fis­cher's re­marks helped push down the dol­lar, which con­tin­ued its slide on Tues­day. It changed hands at 124.64 yen in Tokyo against 124.72 yen in New York late Mon­day. The euro was flat at $1.1019 while firm­ing to 137.34 yen com­pared with 137.31 yen in US trade.

Oil dipped af­ter adding more than two per­cent on Mon­day as deal­ers eyed the latest US energy re­port for clues about de­mand in the world's top crude con­sumer. US bench­mark West Texas In­ter­me­di­ate for Septem­ber de­liv­ery fell 20 cents to $44.76 while Brent crude for Septem­ber eased 18 cents to $50.23.

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