Most Asian Shares Surge on Fed Remarks, China Stocks Plunge


Most Asian Shares Surge on Fed Remarks, China Stocks Plunge

Japanese and Australian shares advanced on Thursday, with the Nikkei Stock Average hitting a four-month high at the close of trading, as investors welcomed US Federal Reserve’s commitment to keep interest rates low.

The Nikkei withstood the rise of the yen and added 1.6% to 15361.16, the highest point at close since January 29. According to Reuters, MCSI’s broadest measure of stocks outside Japan climbed 0.8%.

“The Fed didn’t say much that the market hadn’t already perceived. More interesting is the fact of Japan shares’ divergence from the dollar-yen market gyrations,” Nicholas Smith of CLSA to the Wall Street Journal.

Sharp Corp shares rose 3.5% in Tokyo after the firm said it had manufactured an LCD panel that could be cast into any shape, making it applicable in a wide array of scenarios. Nippon Sheet Glass soared 16.9% after Nomura Securities adjusted upwards the company’s stock rating to “buy” from “neutral.”

Asian stocks also received a boost from Chinese Premier Li Keqiang’s remarks that the country’s economy would not have a hard landing and attained the government’s growth rate of 7.5% this year.  The pronouncements boosted commodity-related shares, particularly in Australia, where miners pushed the blue-chip S&P/ASX200 up 1.6% to 5468.20.

Spot iron-ore added 1% to $90.30, propelling BHP Billiton to a 3.3% gain and Fortescue Metals Group to a 5% rise.


Yet, China shares dropped drastically. Li’s pronouncements killed optimism among investors that Chinese would extend monetary support to the economy in the short-term.

“There are some concerns about insufficient liquidity following the new IPOs, but this likely a temporary fall,” analyst Amy Lin of Capital Securities said.

The Shanghai Composite index plunged 1.6% to 2023.73 while ChiNext of Shenzhen dropped 3.2% to 1320.66.

South Korea’s Kospi climbed 0.1% at 1992.03. Hang Sang Index of Hong Kong was little changed at 23167.73. Straits Times Index went down 0.2% in late trade.

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