Asia stocks climb on US stimulus hopes

Hong Kong shares gained nearly five per cent on Thursday, to extend a broad rally across Asia Pacific into a third day as President Barack Obama’s $819bn stimulus package was approved by the US House of Representatives.

Commodity shares gained on hopes of revived global demand, and the financial sector rose on talk that the US government might set up a bank to hold toxic assets. A good performance on Wall Street overnight also helped the mood.

The Hang Seng index opened 7.8 per cent higher as trading resumed after a three-day break for the Chinese New Year public holiday, although it closed near the day’s lows with a gain of 4.6 per cent higher at 13,154.43. The main sub-index of mainland companies listed in the territory, or H-shares, was 5.1 per cent higher at 7,002.70. Mainland Chinese markets were still closed for holidays.

HSBC, which makes about a quarter of its revenues in North America, showed its biggest daily gain since October. The bank closed 9.0 per cent higher at HK$62.60 as the Federal Reserve looked set to buy long-term US Treasuries.

Hang Seng Bank, in which HSBC has a big stake, rose by 7.1 per cent to HK$91.25 and China Construction Bank rose by 6.0 per cent to HK$3.91.

Mainland resources companies had a good day. Aluminum Corporation of China, or Chalco, rose by 6.9 per cent to HK$3.42 on hopes of better-than-earlier-expected demand should President Obama’s economic policies blunt the worst of the US recession. China Shenhua Energy, a coal producer, gained 8.8 per cent to HK$16.30.

In Japan banks, consumer electronics companies and carmakers accounted for more than half of the market’s gains. Overall, the Nikkei 225 average closed 1.8 per cent higher at 8,251.24 and the broader Topix index also gained 1.8 per cent to close at 818.47.

Sumitomo Mitsui rose by 13.4 per cent to Y3,810 after announcing better than expected results. Mitsubishi UFJ Financial Group gained 4.8 per cent to Y527 and Mizuho Financial rose by 5.2 per cent to Y245.

Fanuc, which makes robots and computer-controlled tools, led the Nikkei’s rally by gaining 6.0 per cent to Y5,850. The electronics components maker TDK rose by 6.4 per cent to Y3,650. Honda Motor rose by 3.9 per cent to Y2,280.

Sony’s announcement of a $200m quarterly operating loss, Toshiba’s forecast of a bigger annual deficit, and Nintendo’s warning that profits would fall by one third because of a strong yen, came after the markets closed. Earlier, Toshiba had risen by 4.9 per cent to Y385, Sony had closed 4.0 per cent to Y1,909 and Nintendo was up 1.6 per cent to Y32,300.

In Australia, BHP Billiton, the world’s biggest miner, rose by 2.7 per cent to A$30.65 although the rest of the market made more modest gains. The S&P/ASX 200 index closed 0.9 per cent higher in Sydney at 3,526.20 – it is the worst performing major Asia Pacific index so far this year, losing 11.7 per cent since the start of January.

Financial stocks in New Zealand rallied after the central bank cut interest rates by 150 basis points to a record low of 3.5 per cent. Australia & New Zealand Banking rose 4.5 per cent to NZ$16.98. The stock market operator NZX gained 7.7 per cent to NZ$5.20 after saying it well sell its carbon registry subsidiary to Markit of the UK.

In Singapore, south east Asia’s biggest bank, DBS, managed to gain more than one per cent to S$9.09 late in the afternoon session in spite of news that its chief executive, Richard Stanley, had leukaemia.