CANBERA (dpa-AFX) - Asian stocks rose sharply on Wednesday, as upbeat economic data from the U.S. and Europe and Chinese Premier Wen Jiabao's pledge to support exporters and small businesses eased global growth worries.
With a successful auction driving down Spanish government bond yields, investors eagerly awaited the results of ECB's new 3-year long-term refinancing operation to be unveiled later in the global day to see if banks in Europe are interested in buying domestic sovereign bonds.
The implementation of the three-year refinancing facility, which will help provide a fresh waive of cheap loans to cash-starved lenders, is being viewed as 'backdoor quantitative easing' as European leaders are facing intense market pressures to resolve the debt crisis.
Tokyo stocks rose sharply as a successful Spanish debt auction coupled with encouraging economic data out of the developed economies spurred buying in export-related shares. The Nikkei average rose 1.5 percent, its sharpest percentage rise for the benchmark index since Dec. 7, while the broader Topix index added a percent.
Canon rose 1.3 percent, Honda Motor advanced 2.4 percent and Pioneer gained 2.9 percent on optimism over the health of the global economy. Sony rallied 3.4 percent after media reports said its group firm has sold 321400 units of its PlayStation Vita portable gaming device in the two days since its release Saturday. Shipping firm Mitsui O.S.K. Lines rose 1.8 percent and steel maker Nippon Steel added 2.7 percent.
Embattled Olympus lost 1.4 percent after news that Japanese prosecutors have raided the headquarters of the company as part of investigations into a multi-billion-dollar accounting fraud. Tokyo Electric, the operator of the crisis-hit Fukushima Daiichi nuclear plant, plunged almost 10 percent on a report that the Japanese government plans to spend about Y1 trillion to take a stake of more than two-thirds in the utility, a move which will amount to a virtual nationalization of the company.
China's Shanghai Composite index reversed early gains to end 1.1 percent lower, extending declines for the third day, as concerns about an economic slowdown and a cash crunch overshadowed positive economic data from the United States and Germany. However, Hong Kong' s Hang Seng index rose 1.9 percent in thin trading, with resource stocks gaining ground on the back of higher commodity prices.
Australian shares joined a global rally in equities, as investors hoped the European Central Bank's new longer-term refinancing operations, offering unlimited three-year refinancing facility to the region's banks, would help contain the region's debt crisis. The benchmark S&P/ASX 200 rose 2.1 percent while the broader All Ordinaries index closed up 2 percent. Miners and energy stocks led the gainers after sharp gains in commodities overnight.
BHP Billiton jumped 3 percent, Rio Tinto advanced 2.5 percent and smaller rival Fortescue rallied 3.2 percent. Macmahon Holdings closed 1.8 percent higher after the engineering firm said it has finalized the contract terms to lay 81 kilometers of rails from Fortescue's main line toward the Solomon deposit in Western Australia.
Woodside Petroleum rose 1.2 percent, shrugging off reports that its Browse liquefied natural gas project in Western Australia is facing more cost blowouts. Oil Search climbed 3.8 percent and Santos closed 2.5 percent higher. Embattled surfwear retailer Billabong soared 10.2 percent as bargain hunters picked up the stock after its recent sharp declines. Investment bank Macquarie Group rose 2.9 percent on the buzz that it is considering selling its retail lending business.
In economic news, the Australian economy is likely to see a below trend growth in the next three to nine months, a key survey revealed. The Westpac-Melbourne Institute leading index rose at an annualized 2.6 percent in October, below its long term trend of 3 percent. However, the annualized growth rate of the coincident index, which gives a pulse of current activity, stood at 3.5 percent, above its long term trend.
South Korea's Kospi soared 3.1 percent as worries of a conflict in the Korean peninsula receded and signs of economic improvement in the United States and Europe boosted investor hopes about the global economic outlook. Tech shares led the gainers, with Hynix, Samsung Electronics, LG Display LCD and LG Electronics rallying 3-5 percent.
Shipbuilders such as Daewoo Shipbuilding, Samsung Heavy Industries and Hyundai Heavy rose 2-3 percent as concerns eased about global growth. Hyundai Motor, South Korea's largest automaker, rose 2.2 percent and shares of its affiliate Kia Motors closed 0.6 percent higher.
Oil refiner SK Innovation climbed 4.2 percent and S-Oil rallied 5.3 percent as crude futures soared in New York overnight, boosted by encouraging economic news and amid renewed concerns over supplies from Iran, after the OPEC member said crude production had dropped due to lack of investment in oil fields.
New Zealand's benchmark NZX-50 ended 0.7 percent higher, as sharp gains in offshore markets outweighed disappointing data on New Zealand's current-account balance. The nation's current account balance fell more-than-expected in the last quarter, with the deficit widening to NZ$4.6 billion from a revised deficit of NZ$844 million in the three months to June, due to softening in demand for some of the more growth-sensitive export commodities, data released by Statistics New Zealand revealed.
Gold miner OceanaGold led the gainers on the exchange, climbing 6.7 percent as gold prices rose to their highest in nearly a week on Tuesday. Tapware manufacturer Methven jumped 5 percent, Australian food ingredient maker Goodman Fielder gained 3.2 percent and Nuplex, the specialty chemicals company, ended up 1.4 percent. Cavalier, Pumpkin Patch and New Zealand Refining paced the declines, falling 2-4 percent.
India's Sensex was last trading up 3.1 percent, as the Indian rupee gained for the first time in three days following the central bank's comments that it would take 'more measures as the need arises' to curb speculation in the currency market.
Elsewhere, Indonesia's Jakarta Composite was up 1.1 percent, Singapore's Straits Times gained 2.3 percent and the Taiwan Weighted soared 4.6 percent.
Crude futures rose above $98 a barrel in Asian trading, copper was up over a percent and the euro edged higher against the greenback on expectations that the ECB operation, dubbed as back-door quantitative easing, would ease worries about the European sovereign-debt crisis.
On Wall Street, stocks rallied overnight in reaction to upbeat news from Europe after the results of a short-term Spanish debt auction revealed strong demand and data showed German business confidence increased more than forecast in December.
The markets also benefited from upbeat U.S. data which showed both housing starts and building permits jumped to a 1-1/2 year high in November. The Dow, the S&P 500 and the Nasdaq climbed around 3 percent each to end the session near their best levels of the day.
Copyright RTT News/dpa-AFX