Asian shares rise after Fed comments

HONG KONG, (AFP) - Asian stocks mostly rose Thursday after another Wall Street rally was sparked by comments from Fed chief Ben Bernanke that the bank had no timetable to hike interest rates.

The news, however, sent the dollar tumbling against the euro although it held up against the yen after Wednesday’s announcement by Standard & Poor’s that it had lowered its outlook on Japan’s sovereign debt.

Tokyo rose 1.63 percent, or 157.90 points, to end at 9,849.74 and Hong Kong added 0.20 percent in the afternoon.

Seoul was flat, ending up 1.65 points at 2,208.35, while Sydney pared earlier gains to end up 0.1 point at 4,873.0 and Shanghai slipped 0.56 percent.

Markets took their lead from Wall Street, where the tech-rich Nasdaq jumped to its highest level since 2000 while the Dow and S&P 500 hit three-year highs after the Fed kept rates at a record low 0-0.25 percent “for an extended period”.

Bernanke said that level “should essentially remain constant going forward from June”.

The Federal Reserve, citing the economy’s “moderate” recovery, also kept the door open for a wider economic stimulus, while saying its current $600 billion programme would be allowed to run its forecast course through June.

Dealers welcomed the news as evidence that the central bank will continue to support the economy as it recovers from the worst downturn since the Great Depression.

“The comments from Bernanke are very bullish for equity markets, via a weak US dollar, US earnings and commodity prices,” RBS Morgans investment adviser Chris MacDonald in Sydney told Dow Jones Newswires.

The dollar tumbled against the euro, hitting $1.4839 in Asian trade, from $1.4785 late in New York on Wednesday. It jumped more than a cent after the Fed announcement.

The US unit also fell to 81.68 yen from 82.15 yen, although the yen’s gains were weighed by S&P’s warning the previous day that it could downgrade Japan’s credit rating in light of the huge economic impact of last month’s earthquake-tsunami and nuclear crisis.

The euro fell to 121.17 yen from 121.39.

“The combination of higher interest rates elsewhere in the world, slow US economic growth and a large US budget deficit is causing investors to shun the greenback,” St.George Bank said in a note to clients.

Expectations of continued loose monetary policy sent the greenback down against other Asian currencies.

The Australian dollar hit a fresh 29 year high against the US unit at US$1.0947 before easing to US$1.0933, while the dollar slipped to 1,071.90 Korean Won, a 32-month low. The British pound hit $1.6745, its highest since December 2009.

The Nikkei posted a second straight gain despite data showing Japanese output fell at a record rate in March due to the earthquake and tsunami that forced companies to shut factories, while household spending also dived.

After the market closed the central Bank of Japan said it had lowered its growth forecast for this fiscal year to 0.6 percent, from 1.6 percent previously. Earlier the bank said it would maintain its zero to 0.1 percent interest rates.

However, it did raise its estimate for the following year to 2.9 percent expansion, instead of 2.0 percent.

On oil markets New York’s main futures contract, light sweet crude for June, rose 55 cents to $113.31 a barrel in the afternoon, while Brent North Sea crude for delivery in June gained 47 cents to $125.60.

Gold opened at $1,526.00-$1,527.00 an ounce in Hong Kong, up from Tuesday’s final figure of $1,505.30-$1,506.30, as the weaker dollar made the precious metal an attractive investment.

In other markets:

-- Taipei closed flat, ending down 8.48 points at 9,040.77.

Taiwan Semiconductor Manufacturing Company rose 0.97 percent to Tw$73.0 while UMC fell 1.31 percent to Tw$15.1.

-- Manila ended 0.98 percent, or 42.49 points, lower at 4,278.83.

International Container Terminal fell 1.0 percent to 49.70 pesos and Philippine Long Distance Telephone gave up 0.2 percent to 2,462.

-- Wellington added 0.33 percent, or 11.72 points, to 3,503.76.

The index was boosted after the central bank left interest rates unchanged at 2.5 percent.

Telecom was up 3.3 percent at NZ$2.185, retailer The Warehouse Group rose 0.8 percent to NZ$3.60 and Air New Zealand was flat at NZ$1.11.