Asia: Bourses up as Wall St buoyed by strong economic data

[HONG KONG] Asia stocks rallied for a second day Tuesday, as a buoyant performance on Wall Street on the back of strong US economic data again stoked buying around the region.

Hong Kong stocks opened up 0.52 per cent and Sydney rallied 0.61 per cent. Shanghai edged down 0.26 per cent after new share issues created tighter market liquidity. Tokyo and Seoul were closed.

Wall Street stocks rose Monday as news of the first rise in US factory orders in eight months helped sustain positive momentum, extending a rally from the previous week.

The Dow Jones Industrial Average gained 46.34 points or 0.26 per cent to 18,070.40 after the Commerce Department said new orders for manufactured goods rose 2.1 per cent in March, after seven straight months of declines.

The broad-based S&P 500 advanced 6.20 points or 0.29 per cent to 2,114.49, while the tech-rich Nasdaq Composite Index rose 11.54 points or 0.23 per cent to 5,016.93.

"As US growth appears to be coming back, chances are we will see rate increases in the second half of this year," Tony Farnham, a strategist at Paterson Securities Ltd. in Sydney, told Bloomberg News.

"There's still plenty of liquidity sloshing around and that's good for the financial markets. We've got quantitative easing happening in Europe and Japan, and China providing additional monetary stimulus." The Australian bourse rose as expectations grew that the central bank will cut official rates to a record 2 per cent from 2.25 per cent, as it tries to tamp down the Australian dollar and stoke economic growth to offset a downturn in the key mining sector.

The Aussie dollar was little changed at 78.42 US cents around midday in Sydney, after shedding 2.3 per cent during a four-day tumble. It breached the 80-cent mark on April 29, a level unseen for three months.

The dollar was flat against the euro and yen in muted foreign exchange trade, with major market Tokyo closed for a holiday.

Nicholas Teo, market analyst at CMC Markets in Singapore, said investors were cheered by the "better-than-expected" US factory orders data.

The greenback bought 120.15 yen in mid-morning Singapore trade from 120.14 yen in New York.

The euro dipped to US$1.1140 from US$1.1146 while easing to 133.87 yen from 133.92 yen.

Oil prices were lower in Asia. US benchmark West Texas Intermediate for June delivery eased 14 cents to US$58.79 while Brent crude fell 12 cents to US$66.33.

Gold fetched US$1,186.70 against $1,182.38 late Monday.

Thailand was also closed for a holiday.

AFP