Most Asian markets finished higher in Wednesday trading as hopes
of an impending American stimulus buoyed markets.
[caption id="attachment_64360" align="alignright" width="300"
caption="The U.S. Treasury Department in Washington D.C."]
Asian markets in Hong Kong, Tokyo, and Taipei all rose on
Wednesday, after rumors surfaced the United States was considering
new stimulus measures. In particular, traders speculated that the
Federal Reserve would enact new measures to catalyze growth.
Tim Leung of IG Investments, Ltd. of Hong Kong
evaluated the rumors in light of global
: "Since what's happening in Europe is causing some concern, there
will be expectation of more easing from the Fed."
As the G-20 summit in Mexico draws to a close,
leaders across the globe have pledged
to do whatever they can to bolster the prospects of the global
economy in Europe's time of need. As a result, many traders have
interpreted these commitments as a sign of further stimulus from
countries in the position to do so.
As one would expect, most Asian markets reacted positively to
these rumors. After yesterday's blip, the Nikkei 225 (
) returned to the green, finishing the day up 1.1%. Like it did on
Monday, the benchmark index hit a monthly high in Wednesday
trading. Real estate and financials benefited the most, as
these industries are best poised to take advantage
of global reflation
The Hang Seng
also finished the day higher
, closing up 0.53%. In addition to the positive momentum created by
the rumors of stimulus by the Fed, names with exposure to Mainland
China like HSBC (
) and Sands China (
) rose 2.6% and 3.3%, respectively. While these moves largely
reflected the Tuesday results of their American trading
counterparts, investors could see these names move even higher if
the Fed does indeed decide to enact more stimulus.
Taipei and Mumbai also finished higher, closing up 0.85% and
The lone outlier amongst major Asian markets was the Shanghai
). China's benchmark index fell slightly, down 0.27%. However,
given the positive reaction in other Asian markets to stimulus
rumors, Shanghai's performance is somewhat concerning. The
Wall Street Journal
cited concerns over the domestic economy
as to why the index underperformed on the day.
Disclosure: Author is long LVS.