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Asian stock markets rise as dollar gains
Asian stock markets rose Wednesday, lifted by new signs of strength in the U
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sian stock markets rose Wednesday, lifted by new signs of strength in the U.S. economy and expectations that Europe's central bank will provide more support to the flagging region. A report showing solid growth in China's services industries also bolstered sentiment.
KEEPING SCORE: Japan's Nikkei 225 rose 0.4 percent to 15,737.34 and Hong Kong's Hang Seng advanced 1.6 percent to 25,155.36. Australia's S&P/ASX 200 inched up 0.1 percent at 5,661.50 while South Korea's Kospi was little changed. Stock markets in mainland China and Southeast Asia also rose.
EUROPE: Expectations are high that the European Central Bank will take additional measures to prevent Europe from falling into deflation when policymakers meet on Thursday. Analysts said even if this week's meeting does not result in stimulus measures, investors will continue to anticipate support from the bank in the coming months.
SOLID US: On Tuesday, the Institute for Supply Management, a trade group, said its gauge of manufacturing reached a three-year high in August, boosted by new orders for goods and increased production. Investors, however, are more interested in clues about when the Federal Reserve will raise interest rates. Later on Wednesday, the Fed will issue its latest Beige Book survey covering economic conditions around the country through late August.
THE QUOTE: "Growth is strong enough to end the asset purchase program in the U.S., and for the Fed to consider raising interest rates. The opposite is true in the Eurozone, where the central bank is considering additional stimulus measures to boost the economy," said Desmond Chua, a market analyst at CMC Markets.
CHINA SILVERLINING: An HSBC report showed that activity expanded at the fastest rate in 17 months in China's services industries. That was a rare encouraging sign from the world's No. 2 economy, which has slowed from double-digit rates of expansion. The HSBC China Service Business Activity Index rose to 54.1 in August from 50 in July.
SAMSUNG SLIDE: Samsung announces new smartphones later Wednesday in Berlin, New York and Beijing that are crucial to reverse dwindling profit from its handset business. But investors don't seem to be expecting a game changer, with Samsung shares dropping as much as 1.2 percent after closing at two-year low on Tuesday. Meanwhile, Apple Inc.'s shares set a record-high on Wall Street, up 0.8 percent, one week ahead of its expected new iPhone announcement.
WALL STREET: The S&P 500 slipped less than 0.1 percent to 2,002.28 on Tuesday. The Dow Jones industrial average fell 0.2 percent to 17,067.56. Market gauges that give greater weight to smaller companies fared better. The Nasdaq rose 0.4 percent to 4,598.19.
CURRENCIES: With solid growth in the U.S. economy and expectations of a rate hike in coming months, the dollar gained against major currencies. The euro fell to $1.3133 from $1.3135. The dollar's rise against the yen halted with the greenback down to 104.98 yen from 105.16 yen.
ENERGY: Benchmark U.S. crude for October delivery was up 40 cents at $93.28 a barrel in electronic trading on the New York Mercantile Exchange. It slumped more than $3 on Tuesday, closing at $92.88. (**)
