The stock market in Asia closed higher on Wednesday after a gain in US housing, suggesting that the world’s largest economy is starting to pick up.
Sydney, Seoul and Shanghai surged after major US indexes gained and home sales in November jumped 7.4 percent, above a predicted 2.5 percent increase.
The housing output, which came after positive earnings and forecasts from corporate dealmakers and technology companies, countered gloom about the economic growth in Q3 being revised lower.
“It’s being driven by sentiment out of the U.S. and the fact that U.S. markets continue to hold up in the face of rather mixed data,” said senior strategist for Newedge Group, Kirby Daley.
Sydney’s S&P/ASX increased 0.6 percent to 4,731.8 while China’s Shanghai Composite Index climbed 0.5 percent or 12.70 points to 064.2. Tokyo was closed for the holiday season after the Nikkei 225 rose.
HK’s Hang Seng Composite Index jumped 0.1 percent or 10.21 points to 21,081.83.
Investors were closely monitoring the US market in the absence of most Asian developments.
“The market realizes that as long as China remains strong, Asia is going to benefit, and as long as the U.S. doesn’t hit a major bump in the road, Asia will remain stable,” said Daley. But after the recent gains, he said, “I don’t think there will be a significant push higher.”
The Chinese government is forecasting an 8.3 percent growth in 2009, following a rebound driven by a $586 billion or 4 trillion yuan stimulus package in Beijing. Economists from the private sector also expect a 9.4 percent growth.
Singapore’s STI closed 0.5 percent, Taiwan’s Taiex climbed 0.6 percent and Seoul’s Kospi ended 0.2 percent.
The Dow Jones rose 0.5 percent or 50.79 points to 10,464.93 following the housing report released by the National Association of Realtors.
The Nasdaq composite index climbed 0.7 percent or 15.01 points to 2,252.67, while Standard & Poor’s 500 index ended 0.4 percent or 15.01 points to 2,252.67.
In currencies, the euro was slightly down at $1.4248, while the dollar rose 0.1 percent.