HONG KONG, June 7: Asian markets mostly rose for a third successive day on Thursday, posting strong gains on hopes for stimulus measures in the United States and Europe as well as promises of help for Spain’s banks.
Tokyo closed 1.24 per cent, or 106.19 points, higher at 8,639.72, while Seoul soared 2.56 per cent, or 46.10 points, to 1,847.95, and Sydney rose 1.31 per cent, adding 53.3 points, to 4,108.6.
In the afternoon Hong Kong rose 0.85 per cent, or 157.76 points, to 18,678.29 but Shanghai closed 0.71 per cent lower, shedding 16.43 points to 2,293.13 owing to nervousness ahead of the release of key economic data at the weekend.
Regional investors followed the lead of their counterparts in Europe and the United States.
While a decision by the European Central Bank to keep rates on hold disappointed investors, its head Mario Draghi said some governors on the policy committee had wanted a cut.
He added that Wednesday's decision was “taken by very broad consensus” — which analysts took to mean that there could be a reduction next month.
The bank also said it would keep cash flowing to the 17-nation eurozone's embattled banks, at least through year-end.
On Spain, French Finance Minister Pierre Moscovici on Wednesday said the eurozone was ready to “mobilise very rapidly” to assist if Madrid requested it, slightly easing fears in the region's fourth largest economy.
Spain has become a huge concern for the eurozone, with Germany against providing aid to Spain to help its banks without a bailout, and other states flexible on how to help Madrid without resorting to a full rescue.
The likelihood of another round of stimulus in the United States rose again as the Fed looks to head off the effects of the European slump on the world's number one economy.
Dennis Lockhart, President of the Atlanta Federal Reserve, said the central bank might need to consider more easing if economic growth there hits more roadblocks, days after another poor batch of jobs growth data.
He said if domestic growth is no longer possible “further monetary actions to support the recovery will certainly need to be considered”, while the Fed rate-setting committee needs to be ready to respond to economic instability.
“The market is starting to price in additional policy response, and there is a greater expectation that something might happen before the Greek election (on June 17),” Tim Schroeders, fund manager, at Pengana Capital in Australia, told Dow Jones Newswires.
Eyes will now be on Fed Chairman Ben Bernanke's testimony on the US economic outlook later in the day for clues to the bank's response.
Investors in Europe and New York welcomed the comments. On Wall Street the Dow surged 2.37 per cent, the S&P 500 rose 2.30 per cent and the Nasdaq climbed 2.40pc.
In Europe, shares in London, Frankfurt, Paris and Madrid were all more than two per cent higher on Wednesday and they extended those gains in early trade on Thursday.
Amid concerns about the impact of Europe's crisis on the US economy President Barack Obama called British, German and Italian leaders Wednesday to press the case for an “immediate plan” to find a resolution.
“The leaders agreed on the importance of steps to strengthen the resilience of the eurozone and growth in Europe and globally,” White House spokesman Jay Carney said.
Hours later, on Thursday morning in Europe German Chancellor Angela Merkel said she wanted to work towards political union but warned that an EU summit later this month would not solve the region's problems at once.
In other markets: Singapore closed flat, edging down 1.57 points to 2,759.26.
Real estate developer Capitaland was up 0.39 per cent at Sg$2.59 while Singapore Airlines fell 0.20 per cent to Sg$10.19.
Taipei gained 0.34 per cent, or 24.16 points, to 7,080.31.
Manila closed 1.14 per cent, or 56.37 points, higher at 5,022.95.
Wellington closed 0.27 per cent, or 9.44 points, higher at 3,273.96.
Auckland Airport rose 0.8 per cent to NZ$2.53, Telecom climbed 1.01 per cent to NZ$2.50 and Contact Energy was up 0.42 per cent at NZ$4.76, while Fletcher Building eased 0.16pc to NZ$6.29.
Kuala Lumpur rose 0.37 per cent, or 5.88 points, to 1,575.31.
Budget carrier AirAsia added 1.93 per cent to 3.70 ringgit, financial firm CIMB Group Holdings gained 0.13pc to 7.50 ringgit and utility Tenaga Nasional lost 0.62 per cent to 6.39 ringgit.
Jakarta was almost unchanged, nudging down 0.74 points to 3,840.60.
Bangkok was flat, edging up 0.58 points to 1,118.53.
Mumbai rose 1.18pc, or 194.75 points, to 16,649.05.—AFP