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Asian markets rally on Wall Street gains

SINGAPORE — Asian stock markets jumped the most in 15 months yesterday, boosted by the overnight rally on Wall Street, where the Dow Jones Industrial Average had its best day in three years amid relief that the United States Federal Reserve is in no rush to raise interest rates in the world’s largest economy.

A pedestrian is reflected on an electronic stock board of a securities firm in Tokyo, Dec 19, 2014.  Photo: AP

A pedestrian is reflected on an electronic stock board of a securities firm in Tokyo, Dec 19, 2014. Photo: AP

SINGAPORE — Asian stock markets jumped the most in 15 months yesterday, boosted by the overnight rally on Wall Street, where the Dow Jones Industrial Average had its best day in three years amid relief that the United States Federal Reserve is in no rush to raise interest rates in the world’s largest economy.

The second straight day of strong gains came while oil prices stayed under pressure, suggesting that share investors are giving more weight to the positive impact of lower fuel costs, such as reduced business costs and increased consumer spending power.

“The Christmas magic continues in markets,” said Societe Generale global head of currency research Kit Juckes on CNBC.

Mr Stan Shamu, strategist at IG Markets, said: “Asia has picked up on the positive lead from US trade and extended its gains from a buoyant session the day before. With the rally managing to last more than a day, I feel the Fed will be pleased it managed to find the right balance with its language.”

The Fed had said after its policy meeting on Wednesday that it would be patient in beginning to normalise the stance of monetary policy.

The central bank said it viewed the statement as consistent with its previous language that it would be a considerable time before it raises rates.

MSCI’s broadest index of Asia-Pacific shares ex-Japan climbed 1.5 per cent yesterday — the steepest daily rise since September last year — as Chinese shares hit their highest in four years before gains were curtailed by profit taking.

Among the key Asian bourses, China’s Shanghai Composite Index ended the day up 1.7 per cent, Hong Kong’s Hang Seng Index rose 1.3 per cent, Japan’s Nikkei-225 Index jumped 2.4 per cent, while Singapore’s Straits Times Index gained 1.1 per cent.

The Dow rose 2.4 per cent on Thursday — the most in a day since December 2011 and extending Wednesday’s 1.7 per cent. In early New York trade yesterday, the benchmark was up 0.2 per cent at 17,810.

Also yesterday, the Bank of Japan ended its last policy meeting of the year by recommitting to a massive stimulus campaign, boosting the monetary base at an annual pace of ¥80 trillion (S$882 billion).

It also offered a brighter view of Asia’s second-largest economy in a sign of confidence that Japan could weather global market turbulence and the financial crisis in Russia.

In the oil markets, benchmark Brent crude continued to hover around the US$60 a barrel mark, having almost halved in value since June amid a global glut of oil, as producers fight for market share while demand growth wanes.

Still, it managed to recover from a near five-and-a-half-year low as investors squared books ahead of the year-end festive break after six months of falling prices.

Brent was up 1.4 per cent at US$60.12 a barrel in afternoon London trade after touching lows last seen in May 2009 a day earlier. The oil price rebound helped the Russian rouble, which climbed 2.1 per cent to 60.25 against the US dollar in Moscow, after having hit a record low of 80 on Tuesday.

Despite the exuberance of the past two days, Mr Shamu warned: “To an extent, the conclusion of the Fed has removed policy risk for markets, but global growth concerns will undoubtedly return to haunt markets soon.” AGENCIES

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