SEOUL: Asian stock markets gained Wednesday following hopes for fresh stimulus from the European Central Bank and China’s steady growth.
“Analysts are divided over the spur for the rallies” in European and U.S. stock markets Tuesday, said CMC chief market strategist Michael McCarthy. “Some point to the potential for European stimulus, while others are looking to steady growth numbers from China. There is market evidence to support both hypotheses.”
Japan’s Nikkei 225 edged 2.4 percent to 15,152.08 and Hong Kong’s Hang Seng gained 1.6 percent to 23,451.05. China’s Shanghai Composite increased 0.4 percent to 2,349.08 and Seoul’s Kospi gained 1 percent to 1,934.96. Australia’s S&P/ASX 200 edged 1.2 percent to 5,387.30
As the region teeters on the brink of recession again, speculation is growing that the European Central Bank will further expand liquidity in the financial system by expanding bond purchases. Analysts say the ECB is suspected of already buying Italian bonds and might be planning to expand that to other nations.
China’s third quarter growth of 7.3 percent, announced Tuesday, was reassuring for investors who were expecting a sharper slowdown in the world’s No. 2 economy. The figure suggests China won’t reach its official 7.5 percent growth target this year but nor is the economy in a tailspin.
Stocks extended their recovery from last week’s swoon and have now erased much of their losses over the last two weeks. Investors were encouraged by China’s growth report and strong quarterly results from Apple and other big companies. The Standard & Poor’s 500 added 37.27 points, or 2 percent, to 1,941.28. The Dow Jones industrial average rose 215.14 points, or 1.3 percent, to 16,614.81. The Nasdaq rose 103.40 points, or 2.4 percent, to 4,419.48.
