Asian stock markets rally on US recovery hopes

AP News
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Posted: May 24, 2016 11:32 PM
Asian stock markets rally on US recovery hopes

SEOUL, South Korea (AP) — Asian stock markets rallied Wednesday as solid U.S. housing sales data and overnight gains on Wall Street raised expectations for a strong recovery in the world's largest economy.

KEEPING SCORE: Japan's Nikkei 225 rose 1.7 percent to 16,778.97 and Hong Kong's Hang Seng index jumped 2.3 percent to 20,283.56. South Korea's Kospi gained 1.1 percent to 1,957.87 while Australia's S&P/ASX 200 advanced 1.7 percent to 5,383.70. Stocks in Taiwan, Singapore and Southeast Asia also gained.

US RECOVERY: The U.S. Commerce Department said Tuesday that new home sales leaped 16.6 percent last month to a seasonally adjusted rate of 619,000, the highest level since January 2008. Steady job gains and low mortgage rates have encouraged more Americans to buy new homes in a sign that the housing market and the broader economy are in good shape.

ANALYST'S TAKE: "Such upbeat data have dissipated doubts concerning the recovery in the housing sector," Mizuho Bank said in a daily commentary. "While this strengthens expectations that the Fed may be more comfortable to raise policy rate in summer, markets do not appear to be unsettled."

WALL STREET: U.S. stocks on Tuesday notched their biggest gain since March. The Dow Jones industrial average rose 1.2 percent to 17,706.05 and the Standard & Poor's 500 index gained 1.4 percent to 2,076.06. The Nasdaq composite index surged 2 percent to 4,861.06.

OIL: Benchmark U.S. crude gained 62 cents to $49.24 per barrel in New York. The contract finished 54 cents higher at $48.62 on Tuesday. Brent crude, used to price international oils, rose 56 cents to $49.17 a barrel in London.

CURRENCIES: The dollar rose to 110.13 yen from 110.06 yen. The euro strengthened to $1.1147 from $1.1143.