Asian stocks lifted by Fed stimulus signal

Agence France-Presse

Posted at Oct 13 2010 12:12 PM | Updated as of Oct 13 2010 08:12 PM

HONG KONG - Asian stocks edged higher on Wednesday after the US Federal Reserve said it may provide more stimulus, with Tokyo getting an extra lift from glowing data on private-sector machinery orders.

In early trade Tokyo's Nikkei Index was up 0.86%, Hong Kong's Hang Seng rose 0.35%, Australia's S&P/ASX 200 added 0.49% and Shanghai's Composite Index was up 0.45%.

The rises came after minutes from last month's meeting of the Fed's Open Market Committee said the central bank was prepared "to provide additional accommodation if needed" to support the US recovery.

That was enough to send US stocks into positive territory and gave a lift to markets across Asia after a uniform plunge on Tuesday.

"Recent comments by Fed Chairman (Ben) Bernanke reassured investors the Fed has the armoury required, and is all too willing to pull the trigger if need be," Christopher Gore, sales trader at GOMarkets in Melbourne, told Dow Jones Newswires.

For Japan the mood was notably improved by data showing that core private-sector machinery orders, a leading indicator of corporate capital spending, had risen 10.1% in August.

That marked a third straight monthly rise and confounded analysts' expectations of a shrinkage, raising hopes that Japan may find a way out of its doldrums.

While worries were likely to return about the yen's strength against the dollar, Kenichi Hirano, strategist at Tachibana Securities, noted that the orders data was "absolutely a surprise".

Bucking the trend however were Australian banking stocks, which fell after news that British-based major Standard Chartered will initiate a rights issue to better protect itself with the introduction of tougher banking rules known as Basel III.

Data meanwhile showing a slight weakening in China's trade surplus was unlikely to ease pressure from the US and other critics who complain Beijing is keeping its currency artificially weak to help Chinese exports, analysts said.

The country's trade surplus fell to $16.88 billion in September compared with $20.03 billion in August, and was the lowest in five months.

On the currency markets the yen was trading at 81.86 to the dollar, slightly down from 81.71 in New York earlier and at 114.26 to the euro, down from 113.81 earlier.

The dollar was at 1.3958 euros, down from 1.3918 in New York.

The US unit's relative weakness continued to boost oil prices however, as traders snap up crude futures.

New York's main contract, light sweet crude for November delivery, gained 38 cents to $82.05 a barrel.

Brent North Sea crude for November advanced 25 cents to $83.75.

World oil prices slid on Tuesday ahead of a meeting of the OPEC production cartel this week, after dominant player Saudi Arabia expressed happiness with current price levels.

Gold opened at $1,353.00-$1,354.00 an ounce in Hong Kong, up from Tuesday's close of $1,344.50-$1,345.50.