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Asian stock markets rise after Fed chief's speech

Asian stock markets rise after Fed chief's speech

August 29th, 2011 in News

BANGKOK (AP) - Asian stock markets rose Monday after Federal Reserve chief Ben Bernanke's prediction that the U.S. economy will eventually return to full health fueled gains on Wall Street.

Oil prices lingered above $85 a barrel in Asia after Hurricane Irene did little damage to refineries along the U.S. East Coast. The dollar was higher against the yen but lower against the euro.

Market optimism was fueled after a highly anticipated speech by Bernanke at a conference in Jackson Hole, Wyoming. While he announced no new economic stimulus measures - as some investors had hoped - he did leave open the possibility of more action if another recession looks likely. He also emphasized the strengths of the U.S. economy and said the job market will recover in the long run.

"People came to realize that Bernanke is very confident about the economy," said Jackson Wong, vice president at Tanrich Securities in Hong Kong. "People were reluctant to get into the market. Now they are jumping back in."

Japan's Nikkei 225 rose 0.6 percent to 8,846.32. Australia's S&P/ASX 200 gained 1.9 percent to 4,277.70 and Hong Kong's Hang Seng rose 1.5 percent to 19,879.51.

Hong Kong-listed Sinopec, Asia's largest refiner by capacity, jumped 5.7 percent after announcing that first-half profit rose 12 percent as higher oil, gas and chemicals revenues helped offset a loss in its refining business. The results for the company, also known as China Petroleum & Chemical Corp., were better than analysts had forecast.

South Korea's Kopsi index jumped 2.8 percent to 1,829.09. Leading shipbuilder Hyundai Heavy Industries Co. soared 8.4 percent. Hynix Semiconductor, the world's second-largest memory chip maker, jumped 7.5 percent on brighter chip price forecasts, Yonhap News agency said. Refinery SK Innovation rose 6.5 percent.

Gold-related shares rose after prices of the precious metal rebounded Friday after a volatile week. Newcrest Mining Ltd., Australia's largest gold miner, rose 2.1 percent. Hong Kong-listed Zijin, China's top gold miner, was 1.7 percent higher. Hong Kong jewelry chain Chow Sang Sang Holdings gained 6.4 percent.

Other Australian metals shares rose on the back of higher commodities prices. BHP Billiton Ltd., the world's largest mining company, rose 1.7 percent. Rio Tinto Ltd. gained 2.4 percent.

Mainland Chinese shares dipped, however, amid reports that the central bank is considering further increases to banks' required reserves. The benchmark Shanghai Composite Index lost 0.5 percent to 1,163.99 and the smaller Shenzhen Composite Index was 1.1 percent down to 2,584.40.

On Friday, the Dow Jones industrial average rose 1.2 percent to close at 11,284.54. The Standard & Poor's 500 index rose 1.5 percent to 1,176.80. The technology-heavy Nasdaq composite index rose 2.5 percent to 2,479.85.

The Fed has said it plans to keep short-term interest rates low until mid-2013. Low rates on investments like bonds make higher-risk bets such as stocks more attractive.

The U.S. economy is still hobbled by a depressed housing market, high oil prices and fears that the European debt crisis will deteriorate into a repeat of the 2008 financial crisis.

Benchmark oil for October delivery was up 18 cents to $85.55 in electronic trading on the New York Mercantile Exchange. Crude rose 7 cents to settle at $85.37 on Friday.

In London, Brent crude for October delivery was down 33 cents at $111.10 on the ICE Futures exchange.

In currencies, the euro was up at $1.4497 from $1.4484 in late trading in New York. The dollar rose to 76.73 yen from 76.66 yen.