Asia stocks rise after US Fed stays the course

Published on NewsOK Modified: March 21, 2013 at 12:17 am •  Published: March 21, 2013

BANGKOK (AP) — Asian stock markets were mostly higher Thursday on an improvement in China's manufacturing and the U.S. central bank's message that it will keep interest rates at record lows despite signs of improvement in the world's biggest economy.

Federal Reserve Chairman Ben Bernanke said at the end of a two-day policy meeting that the Fed won't alter its aggressive monetary easing — $85 billion in monthly bond purchases to push down borrowing costs — until it is convinced the economy's gains can be sustained.

Fed officials reinforced their plan to keep short-term interest rates at rock-bottom levels at least until unemployment falls to 6.5 percent. The current unemployment rate is 7.7 percent.

"Overall, Bernanke is providing lots of assurances to markets that US monetary policy will stay ultra-accommodative for quite some time," said analysts at DBS Bank Ltd. in Singapore.

Another positive sign for markets came from a survey showing a better-than-expected manufacturing performance by China in March. HSBC's preliminary purchasing managers' index rose to 51.7 from 50.4 in February on a 100-point scale. Analysts were expecting a reading of 50.8.

Japan's Nikkei 225 index surged 1.1 percent to 12,604.22. Benchmarks in Singapore, Indonesia and Taiwan also rose. South Korea's Kospi slipped 0.4 percent to 1,953.20. Australia's S&P/ASX 200 shed 0.1 percent to 4,962.90.

Hong Kong's Hang Seng rose 0.1 percent to 22,281.18, after briefly dipping into negative territory from an apparent sell-off prompted by skepticism about market levels in mainland China the day before. The Shanghai and Shenzhen composite indexes soared 2.8 percent and 2.7 percent respectively Wednesday. Thursday's advance was more modest.

Francis Lun, managing director of Lyncean Holdings in Hong Kong, said the large gains were fueled by rumors from speculators that China's social security fund was preparing to put 100 billion yuan ($15.9 billion) into equity markets.

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