Asian stocks up as gloom fades, bargains sought
Wednesday, September 7, 2011
BANGKOK (AP) — Asian stock markets rebounded Wednesday as traders looked past bleak U.S. jobs data and Europe's debt crisis to scoop up bargains following a steep sell-off.
Oil prices lingered above $86 per barrel. The dollar fell against the euro and the yen.
Japan's Nikkei 225 index, which on Tuesday fell to its lowest level since April 2009, rose 1.7 percent to 8,734.42. A slightly softer yen helped Japan's powerhouse export sector recover from the beating it took earlier this week.
Mazda Motor Corp. jumped 3.4 percent, and Sony Corp. gained 2.7 percent. Toyota Motor Corp. rose 2.2 percent.
Markets received further good news when the Australian government said the economy expanded 1.2 percent in the quarter through June, rebounding from a 0.9 percent contraction in the previous three months. Australia's S&P/ASX 200 gained 2.3 percent at 4,168.10.
South Korea's Kospi clawed back the prior day's losses to rise 2.7 percent at 1,814.60. Blue chip high-tech stocks were among those leading the way. Hynix Semiconductor, the world's second-largest memory chip maker, soared 7.4 percent. LG Electronics Inc., which ranks No. 2 globally in flat screen televisions, was 8.1 percent higher.
Peter Lai, director of DBS Vickers in Hong Kong, said investors were bargain-hunting for deals in commodities, the retail sector and industries favored by the Chinese government, like infrastructure.
Retailing shares in Asia also are attractive, Lai said, because governments in the region have been trying to persuade their traditionally thrifty populations to spend rather than save. GOME Electrical Appliance Holdings, China's largest appliances retailer, jumped 4.4 percent.
"Asians traditionally are big savers. This is why Asian countries have been encouraging people to convert part of their saving power into spending power," he said.
Gold prices, meanwhile, backed off recent all-time highs, causing gold shares to decline. Newcrest Mining Ltd., Australia's top gold miner, lost 0.8 percent.
A wave of negative sentiment slammed global stock markets last Friday, when a government report said the U.S. economy failed to add any new jobs in August. It was the worst reading on jobs since September 2010.
But signs of growth in the U.S. service sector helped tame concerns about another U.S. recession. The Institute for Supply Management said Tuesday that the service sector grew more than analysts had expected in August.
Growth in that part of the economy, which employs nearly 90 percent of America's work force, fell the three previous months.
"The better than expected reading for the August US non-manufacturing ISM index helped to provide some relief to risk assets but there is still likely to plenty of nervousness in the days ahead, with any improvement in risk appetite likely to prove fragile," Credit Agricole CIB said in a research note.
The Dow Jones industrial average fell 0.9 percent to 11,139.30. The Standard and Poor's 500 index dropped 0.7 percent to 1,165.24. The Nasdaq composite fell 0.2 percent to 2,473.83.
Separately on Tuesday, the Swiss franc dropped sharply after the country's central bank pegged it against the euro in an attempt to rein in the export-sapping appreciation of the currency.
The franc has been hugely in demand in recent weeks due to its widely perceived status as a safe haven during times of market volatility.
The dollar fell to 77.16 yen from 77.67 yen in late trading Tuesday in New York. The euro rose to $1.4044 from $1.3991 after falling below $1.40 for the first time since July 13.
In commodities trading, benchmark oil for October delivery rose 40 cents to $86.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 43 cents to end at $86.02 per barrel on Tuesday on the Nymex.
In London, Brent crude for October delivery rose 41 cents to $113.30.