Asia stocks rally after central banks’ action; Nikkei up 1.95%

Investing.com – Asian stock markets soared on Thursday, tracking sharp overnight gains on Wall Street as investors cheered a coordinated move by major central banks to boost the capacity to inject liquidity into the global financial system.
  
During late Asian trade, Hong Kong's Hang Seng Index soared 5.6%, Australia’s ASX/200 Index rallied 2.65%, while Japan’s Nikkei 225 Index jumped 1.95%.

Appetite for riskier assets strengthened after six major central banks, including the Federal Reserve and the European Central Bank agreed on Wednesday to lower dollar swap rates to prevent a lack of liquidity in the global financial system.

The surprise announcement came after the People’s Bank of China said that it plans to cut banks reserve requirement ratios by 0.5%, in an effort to help boost liquidity and support the world’s second largest economy amid global market turmoil.

The Nikkei jumped to a three-week high, boosted by strong gains in lenders. Mitsubishi UFJ Financial Group rose 3.1%, rival Sumitomo Mitsui Financial Group saw shares climb 3%, while shares in investment bank Daiwa Securities rallied 4%.

Shares in Japanese exporters with high exposure to China performed strongly. Heavy machinery maker Komatsu, which counts China as its fastest- growing market surged 7.25%, while Hitachi Construction Machinery, which depends on China for nearly 25% of its revenue, rallied 7.35%.

Elsewhere, in Hong Kong, shares in lenders led markets higher, buoyed by the first cut in reserve ratios for lenders since December 2008, fuelling speculation that China's monetary policy has swung into easing mode.

Hong Kong-listed shares of China’s largest bank Industrial and Commercial Bank of China soared 10.4%, Bank of China shares rallied 10.8%, while life insurer Ping An saw shares skyrocket 12.1%.

Property developers also contributed to gains, with Agile Property Holdings surging 15.4% and China Overseas Land & Investment shares rallying 11.4%.

Raw material producers also performed strongly, tracking commodity prices higher. Jiangxi Copper Company jumped 11.9%, oil and gas giant CNOOC gained 10.9%, while gold producer Zijin Mining Group added 8.6%.  

Asian equities shrugged off official data showing that Chinese manufacturing activity contracted in November for the first time in nearly three years as export orders fell sharply.

Meanwhile, the outlook for European stock markets was upbeat. The EURO STOXX 50 futures pointed to a gain of 0.3%, France’s CAC 40 futures rose 0.5%, the FTSE 100 futures gained 0.6%, while Germany's DAX futures added 0.45%.

Later in the day, the U.S. was to release its weekly report on initial jobless claims, while the Institute of Supply Management is to release data on manufacturing activity.