HomeMarket NewsAsian shares broadly higher on US lead; BOJ in focus

Asian shares broadly higher on US lead; BOJ in focus

China's benchmark Shanghai Composite index opened up 0.6 percent, as brokerages rebounded after suffering steep losses in the previous sessions due to a crackdown on margin financing.

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By CNBCTV18January 21, 2015, 7:57:59 AM IST IST (Updated)

Asian shares broadly higher on US lead; BOJ in focus

Asian stocks were broadly higher early Wednesday, as traders looked ahead to the Bank of Japan's announcement of its monetary decision, after a two-day policy meeting.



"Although we are not expecting anything out of the ordinary today, it will be interesting to see if energy prices are raining on their [BOJ policymakers'] inflation goals, along with the consumption tax introduced in April last year," Evan Lucas, IG's market strategist, said. "Further downside in the inflation rate will force the BOJ to rethink its position once again."


Overnight, US stocks ended higher after wavering between positive and negative territories, as investors tracked the price of oil and fourth-quarter earnings from corporations including Johnson & Johnson. The Dow Jones Industrial Average fell as much as 164 points, and bounced back to close flat. The S&P 500 added 0.2 percent while the tech-heavy Nasdaq settled 0.4 percent higher.


Oil declined about 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast on lower fuel demand and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action. US crude finished 4.7 percent lower at $46.39 a barrel, near its intraday bottom of $46.23. Brent crude dropped 70 cents to $48 a barrel.


Meanwhile, the World Economic Forum in Davos kicks off today with the spotlight firmly on the European Central Bank and the weakness in the euro zone economy. Speaking overnight, former US Treasury Secretary Larry Summers warned that the European economy is on the "brink of deflating" and urgently needs more stimulus, particularly from Germany.


Nikkei drops 0.6 percent


Japan's benchmark Nikkei 225 index fell early Wednesday, as the yen strengthened 0.3 percent against the US dollar to fetch 118.4. Automaker stocks suffered as a result; Toyota Motor and Nissan fell 1.7 and 0.1 percent, while Suzuki Motor plunged 2.6 percent.


Tokyo-based electrical equipment manufacturing company Fujikura was the top loser with a 3.9 percent slump.


Mainland indices up


China's benchmark Shanghai Composite index opened up 0.6 percent, as brokerages rebounded after suffering steep losses in the previous sessions due to a crackdown on margin financing. Haitong Securities and Founder Securities gained over 2 percent each, while Citic Securities piled on 0.9 percent in early trade.


Among top gainers, train makers CSR and China CNR scaled up more than 8 percent each on news that the former's board has approved its merger with CNR through a share swap.


Spring Airlines began its debut in Shanghai on a positive note, with shares of the Chinese budget carrier jumping 44 percent to 26.15 yuan, compared with its issue price of 18.16 yuan.


Meanwhile, Hong Kong's Hang Seng index opened 0.8 percent higher.


ASX rises 1.3 percent


Australia's key S&P ASX 200 index jumped to a one-week high in early trade, while the Australian dollar pared losses to buy $0.8171 to the dollar.


Gold producers led gains, with Evolution Mining and Beadell Resources surging 8.4 and 4.2 percent as spot gold rose to a four-and-a-half-month high on Tuesday.


BHP Billiton added nearly 2 percent, after the world's biggest miner announced that it would cut its shale drilling spending over the next six months as it looks to meet its promise not to cut dividends in the face of a collapse in iron ore, copper and oil prices.


Meanwhile, a survey by the Melbourne Institute and Westpac Bank showed Australia's consumer sentiment rebounded in January as sharp falls in petrol prices and better news on employment left people more ready to splash out on major items. Retailers were broadly higher on the news; Myer and Harvey Norman escalated 1.4 and 1 percent, respectively, while JB Hi-Fi crept down 0.4 percent.


Kospi loses 0.4 percent


South Korean shares backed down from a one-week high to slip into negative territory, as losses widened in the energy and utility sectors. Korea Gas, Kepco and SK Innovation made losses over 2 percent each.


Korean Air traded 0.6 percent higher percent on news that its affiliate Hanjin Energy has sold all of its stake in South Korean refiner S-Oil to Aramco Overseas Company, a unit of Saudi Arabia's state oil firm.

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