Stocks in South Korea soared to a fresh high early Thursday, leading broad gains across the region after the nation's central bank held interest rates at a record-low in a vote of confidence in the economy.
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The Kospi Index was last up 1%, with the index's gains accelerating after the Bank of Korea's decision Thursday morning to hold rates at 1.25% for a 10th straight meeting. Korea's stock market has been on a roll of late, hitting record highs as strong local corporate results and economic optimism propelled gains.
"Looking ahead, we doubt a rate change will come onto the agenda any time soon," said Krystal Tan, Asia economist at Capital Economics. "With the economy showing signs of improvement, there is no urgency for rate cuts."
Equities elsewhere in the Asia-Pacific region also rose, with the latest U.S. Federal Reserve minutes that hinted at a June rise in interest rates being no surprise to the market. .
Investors were also positioning themselves ahead of the meeting of the Organization of the Petroleum Exporting Countries, due to begin later in the global trading day.
The Nikkei Stock Average was up 0.4% in early morning trade, with a stronger yen capping earlier gains after a fall in the dollar overnight following the Fed minutes. The dollar has since recovered, with the yen recently down 0.1% against the greenback.
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Elsewhere, Australia's S&P/ASX 200 was up 0.3%, the Shanghai Composite Index gained 0.2%, while the Taiex in Taiwan rose 0.4% to a fresh 17-year high.
The Fed minutes were "not so different than what market expected," said Yujiro Goto, global FX strategist with Nomura. The likelihood of a June rate rise was at 83.1%, versus 78.5% on Wednesday, according to data from CMEGroup.
Meanwhile, Hong Kong equities largely ignored the investment rating downgrade late Tuesday by Moody's Investors Service, mirroring a move by the ratings company on China. Nonetheless, Moody's changed the outlook for Hong Kong to stable from negative. The Hang Seng Index was last up 0.8% at a 22-month high.
In commodities, oil prices rebounded from losses the previous session as OPEC officials in Vienna suggested output cuts could be extended into next year. Brent, the global crude oil benchmark, was 0.9% higher in Asia.
Among individual oil stocks, Hong Kong-listed Sinopec was up 0.8% and Australia's Woodside Petroleum added 1.3%.
In Singapore, revised estimates released Thursday showed that city-state's first-quarter gross domestic product contracted 1.3% on a seasonally adjusted and annualized basis from the previous quarter. This was less than previously estimated for the three-month period, helped by strength in manufacturing and construction. The country's benchmark index was last up 0.3%.
Suryatapa Bhattacharya contributed to this article.
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Moody's Investors Service downgraded its rating for Hong Kong late Wednesday. "Asian Shares Broadly Higher; Korea Stocks Rise to Fresh Record," at 0253 GMT incorrectly stated the day in the ninth paragraph. (May 25)
(END) Dow Jones Newswires
May 24, 2017 23:32 ET (03:32 GMT)