Asian shares ended higher Thursday after the U.S. Federal Reserve and central banks in the euro-zone announced yesterday they had agreed to reduce the cost of offering dollar financing through swap arrangements.
The Nikkei gained 1.9%. The Shanghai Composite was up 2.3% and the Hang Seng surged 5.6%. The Sensex lifted 2.3% while in Sydney the S&P/ASX All Ordinaries was up 2.5%.
China’s apex bank also added to gains for bank shares after it said late yesterday it is cutting its reserve requirement ratio for large banks by 50 basis points, to 21%, effective December 5. This is the first time the People’s Bank of China has cut rates since December 2008 and followed a modest easing for small rural banks last month.
Economic data out also added to the positive momentum on Wall Street overnight as a private sector employment report showed a rise of 26,000 jobs in November, the biggest jump since December last year.
Stocks on the Move
Asian banks were among the major gainers after the coordinated action by central banks yesterday.
Mitsubishi UFJ Financial was up 3.1% in Tokyo. Sumitomo Mitsui and Mizuho gained 3% and 2% each. Nomura Holdings climbed 2.8%.
Stocks were up across sectors with metal shares among the big winners after a rise in commodity prices overnight. JFE Holdings gained 8.9% while Nippon Steel Corp. added 7.1%.
Bank shares took the Hang Seng index rapidly upward after the monetary easing in China and index heavyweight ICBC rose 10.7%. AgBank gained 9% and Bank of China rose 10.4%. China Construction Bank Corp. was up 6.1%.
Real estate firms also gained from the policy easing move with shares of China Resources Land, Agile Property Holdings and China Overseas Land & Investment all gaining between 10% and 15%.
In resources, Jiangxi Copper was up 12.5% while Aluminum Corp. of China added 7.9%. Angang Steel Co. surged 14.8% while oil major CNOOC climbed 9.4%. PetroChina was up 5.4%.
Metals and banks led gains in Mumbai as well with Hindalco and ICICI Bank the top gainers on the Sensex, up 7% and 6.8% each, respectively.
Sterlite gained 6.2% while Tata Motors revved 6.1%. Realty major DLF was up 5.3%.
Tata Steel, Jaiprakash, Hero MotoCorp and Jindal Steel were up in a range between 4.1% and 4.6%.
Other bank stocks also advanced, tracking similar movements in financials in global markets. SBI and HDFC Bank gained 3.2% and 2.4% each, respectively.
Ranbaxy pared gains but still ended up 1.4% after it received approval from the US Food and Drug Administration for the launch of Lipitor - the cholesterol busting drug - in the US.
Aussie shares also lifted on news of the move by some of the world's biggest central banks to boost the liquidity of commercial lenders.
In financials, CBA, WBC, ANZ and NAB were up in a range between 2.5% and 3.3%. Investment bank Macquarie Group rose 5.2%.
Resources also gained with BHP Billiton up 4.1% and Rio Tinto 4.7% higher. In energy, Woodside climbed 2.2% and Oil Search moved up 1.6%.
Foster’s Group was up 0.2% after shareholders overwhelmingly approved the $10.48 billion takeover by Anglo-South African brewer SABMiller.
