Asian stocks surge
Key markets on three-month high after positive US car sales and hope of G20 action.
Japan’s Nikkei average surged more than four per cent to a three-month closing high. Positive signes in US salesfigures for March and a pick-up in manufacturing activity are being credited with the lift.
Castor Pang, a strategist with Sun Hung Kai Financial, said: “US data aside, we’ve seen a lot of interest in Chinese stocks today after the Shanghai index broke a major resistance level.
“This is expected to induce more investors to pile into the market in the near-term.”
Elsewhere, benchmarks in Australia, Taiwan, Singapore and India gained between three and 5.3 per cent.
Tracking G20
Investors were closely tracking the G20 meeting, looking for confirmation that governments will continue to take action to bolster the world economy and shore up the financial system.
Toru Umemoto, chief foreign exchange strategist for Japan at Barclays Capital, told Reuters: “Market participants are becoming more convinced of a global recovery and that is causing risk appetite to increase.”
The euro gained despite expectations of an interest rate cut from the European Central Bank to a record low of one per cent from 1.5 per cent.
European stocks were also expected to open higher with investors looking for action from the G20 leaders.
The FTSEurofirst 300 index of top European shares was up 2.6 per cent, on track for its third straight day of gains, helped by better-than-feared US home sales and factory data.
“We think the [global] policy effort will work,” said Bernard McAlinden, a strategist at NCB Stockbrokers in London. “But there will continue to be volatility in markets.”