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Asia stocks rally with Fed chair race, policy meeting in focus

Published 09/16/2013, 02:45 AM
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Investing.com - Asian stock markets kicked off the week with strong gains on Monday, after former U.S. Treasury secretary Larry Summers withdrew himself from consideration to be the next Federal Reserve chairman.

Traders now turned their attention to this week's U.S. monetary policy decision on Wednesday.

During late Asian trade, Hong Kong's Hang Seng Index rose 1.2%, Australia’s ASX/200 Index ended up 0.55%, while Japan’s Nikkei 225 Index remained closed for a public holiday.

Market sentiment improved after Summers pulled out of the race to be the next Fed chairman, easing investor concerns that he would roll back economic stimulus measures more aggressively than his main rival for the post, current Fed Vice Chairwoman Janet Yellen.

Meanwhile, investors shifted their focus to the Fed’s upcoming two-day policy meeting, which concludes on Wednesday, amid ongoing speculation over the timing of the central bank’s widely expected reduction in monthly bond purchases.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of global equities.

In Australia, the benchmark ASX/200 Index rallied to the highest level since May 2008 in morning trade, before trimming some gains.

Gold miners Newcrest Mining and Kingsgate Consolidated saw shares rally 5.1% and 5.6% respectively after gold prices jumped more than 1% on news Summers withdrew from consideration to be the next chairman of the U.S. central bank.

Meanwhile, in Hong Kong, the Hang Seng rallied to a four-month high on the Summers news.

Golf producer Zijin Mining Group gained 1.65%, while Zhaojin Mining Industry Company jumped 4.4%.

Looking ahead, European stock market futures pointed to a higher open.

The EURO STOXX 50 futures pointed to a gain of 0.9% at the open, France’s CAC 40 futures added 0.75%, London’s FTSE 100 futures advanced 0.85%, while Germany's DAX futures pointed to a gain of 1.1% at the open.  

The euro zone was to release data on consumer price inflation later Monday, while European Central Bank President Mario Draghi was to speak in Berlin.

The U.S. was to publish the Empire state manufacturing index, in addition to data on industrial production and the capacity utilization rate.

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