Jan 22, 2016 12:38 AM
Asia stocks extend global rally on ECB hopes, oil rise
The Associated Press
HONG KONG (AP) Japan led a rally in Asian stocks Friday, extending a global market rebound fueled by the prospect of more stimulus from the European Central Bank and a bounce in battered oil prices.
KEEPING SCORE: Japan's Nikkei 225 soared 5.3 percent to 16,863.76 on hopes the Bank of Japan would join Europe in promising further monetary stimulus. South Korea's Kospi gained 1.6 percent to 1,870.80. Hong Kong's Hang Seng added 2.2 percent to 18,945.08 and the Shanghai Composite Index in mainland China climbed 0.4 percent to 2,891.23. Australia's S&P/ASX 200 rose 1 percent to 4,913.70. Benchmarks in Taiwan, Southeast Asia and New Zealand were also up.
STIMULUS HOPE: European Central Bank chief Mario Draghi cheered investors by saying the bank is prepared to take action as early as its next meeting in March to expand existing stimulus efforts. While the ECB left key interest rates and its 1.5 trillion euro ($1.6 trillion) monetary stimulus program unchanged Thursday, Draghi underscored his willingness to ramp up the program if plummeting oil prices and market turmoil threaten the continent's weak economy.
ANALYST VIEW: "It's been another volatile week in financial markets as investors continue to fret about the global growth outlook," Shane Oliver, head of investment strategy at AMP Capital Management in Sydney, said in a report. "Share markets remained under pressure but managed to rally off their lows helped by strong signs of further monetary easing from the ECB," he said. "It's still too early to say that shares have bottomed, but given increasing pessimism, indications that shares are oversold and more dovish central banks, there is a good chance we will see at least a short-term bounce."
ENERGY: Rebounding oil prices are also supporting investor sentiment. Crude futures extended gains after bouncing back from their worst day in four months. U.S. benchmark crude rose 66 cents to $30.18 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.18, or 4.2 percent, to close at $29.53 a barrel Thursday. Brent crude, a benchmark for international oils, rose 95 cents to $30.19 a barrel in London.
WALL STREET: Major U.S. benchmarks ended higher Thursday. The Dow Jones industrial average rose 0.7 percent to 15,882.68 and the Standard & Poor's 500 gained 0.5 percent to 1,868.99. The Nasdaq composite index added less than half a point to close at 4,472.06.
CURRENCIES: The dollar rose to 117.98 yen from 117.77 yen on Thursday. The euro weakened on the prospect of further stimulus, slipping to $1.0833 from $1.0851.