HONG KONG: Asian markets made modest gains on Monday, as speculation eased over whether the Federal Reserve will begin an early tapering of its massive stimulus program.
Emerging-market currencies suffered a torrid few days of trading last week, as dealers bet on an end to the Fed’s $85-billion-a-month monetary easing.
But figures showing a slump in US housing market sales on Friday allayed fears of an early tapering, and led to rallies in Europe and the United States.
The feel-good factor carried on into the start of the new week’s trade in Asia, with
Sydney closing up 0.23 percent, or 12 points, at 5,135.4, and Seoul gaining 0.95 percent, or 17.70 points to 1,887.86.
Tokyo stocks opened 0.43 percent higher but ended down 0.18 percent, or 24.27 points at 13,636.28. Dealers said that the early gains were eroded by profit-taking.
During afternoon trade, Hong Kong was up 0.69 percent while Shanghai jumped 1.74 percent.
In emerging markets, where currencies tumbled last week over concerns that the stimulus-inspired investment splurges in their regions would end, trade was broadly positive.
Jakarta was flat in early afternoon trade while Kuala Lumpur was up 0.63 percent. Mumbai was up 0.50 percent in mid-morning trade.
There was some much-needed respite for emerging-market currencies. The Indian rupee, which tumbled to a record low of 65.56 to the dollar last week, fetched 64.23 to the dollar in Tokyo morning trade against 64.45 on Friday afternoon.
The Indonesian rupiah edged up to 10,770 from 10,963.
In India, however, analysts said that tough times were still ahead for the ailing national currency.
“The rupee is still in a bearish phase and the demand for dollars is not down,” said Param Sarma, chief executive with NSP Forex.
Expectations of an end to the US stimulus program have seen foreigners in recent months repatriate some of the vast sums that have poured into emerging economies.
The pullout has hit currencies and equities. The dollar was largely unchanged against major currencies. It was at 98.60 yen in Tokyo afternoon trade while the euro bought $1.3382 and 131.91 yen.
The market rises in Asia echoed modest gains on Wall Street and in Europe at the end of last week.
The Dow Jones Industrial Average rose 0.31 percent while London closed 0.70 percent higher. Frankfurt added 0.23 percent and Paris rose 0.25 percent. The positive trading was also helped by upbeat manufacturing data from Europe, the United States and China.
But analysts warned that the lack of economic pointers, apart from ongoing speculation over what the Fed might do, would make trade unpredictable in the coming days.