Asian stock markets were boosted on Friday by further proof that the U.S. economy is on the upswing.
Reports showing better-than-expected consumer spending, a jump in pending home sales and a drop in jobless claims emboldened investors to dive into riskier assets like stocks. Wall Street posted its third-straight gain of the week.
Japan’s Nikkei 225 index surged 3.3 per cent to 13,648.81. Hong Kong’s Hang Seng advanced 1.3 per cent to 20,708.18. South Korea’s Kospi added 1.5 per cent to 1,862.56. Australia’s S&P/ASX 200 gained 0.3 per cent to 4,826.40.
Investors were also encouraged by comments from key U.S. Federal Reserve officials. The president of the New York branch of the Fed said the central bank would likely keep buying bonds if the economy failed to grow at the pace expected. Jerome Powell, a member of the Fed’s board in Washington, said investors appear to have incorrectly concluded that the Fed will taper its purchases soon.
That brought a sign of relief to markets fearing that a pullback by the Fed would deflate stock and commodity markets, where investors have turned due to the low interest rates created by the bond buying program.
In New York, the Dow Jones industrial average rose 0.8 per cent, to 15,204.49. The Standard & Poor’s 500 rose 0.6 per cent, to 1,613.20. The Nasdaq composite index rose 0.8 per cent, to 3,401.86.
Benchmark oil for August delivery was up 12 cents to $97.17 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.55 a barrel to close at $97.05 on the Nymex on Thursday.