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Asia stocks rebound from route after Fed pledge; Nikkei up 1.1%

Published 08/10/2011, 03:05 AM
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Investing.com – Asian stock markets were broadly higher on Wednesday, rebounding from the previous day’s sharp drop as sentiment was lifted by strong overnight gains on Wall Street and after the Federal Reserve pledged to keep rates at ultra-low levels “at least” through mid-2013. 

During late Asian trade, Hong Kong's Hang Seng Index jumped 2.5%, Australia’s ASX/200 index rallied 2.7%, while Japan’s Nikkei 225 Index climbed 1.1%.

The Federal Reserve pledged on Tuesday to keep its benchmark interest rate at an all-time low, adding that it will maintain a loose monetary policy until “at least through mid-2013.”

The Fed also indicated that it “discussed the range of policy tools available to promote a strong economic outlook recovery in a context of price stability” and said it was prepared to employ the tools “as appropriate”.

Shares in the beaten up commodity sector performed strongly, after oil and industrial metal prices advanced on the New York Mercantile Exchange.

The nation’s largest oil explorer Inpex saw shares jump 2.8%, shares in JX Holdings, the country’s biggest oil refiner and copper producer, rose 1.85%, while metal producer Mitsui Mining & Smelting rallied 3.3%.

Nuclear power plant operator Tokyo Electric Power Company saw shares surge 15.4% after President Toshio Nishizawa said government support will protect the power company from insolvency.

In Hong Kong, oil producers were higher, as rising prices boosted earnings prospects for energy explorers. Oil and gas giant PetroChina saw shares climb 3.8%, shares in China’s largest offshore oil producer CNOOC soared 6.5%, while shares in Sinopec added 2.6%.

Hong Kong-listed shares of HSBC Holdings rallied 3.9% before trading in the stock was suspended in the afternoon session, in the wake of the bank’s announcement of the sale of its U.S. card and retail services business to Capital One Financial for nearly USD2.6 billion.

The outlook for European stock markets was upbeat. The EURO STOXX 50 futures pointed to a strong gain 2.1%, France’s CAC 40 futures jumped 1.3%, the FTSE 100 futures rose 1.8%, while Germany's DAX futures indicated a gain of 2.5%.

Later in the day, the U.S. was to produce data on the federal budget balance as well as reports on crude oil stockpiles and wholesale inventories.

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