Asian stocks cheered by US easing

Asian stocks climbed to their highest levels in more than two years as investors across the region greeted the US Federal Reserve’s decision to expand its quantitative easing policy with alacrity.

Mumbai leapt to a record closing high on the eve of the Diwali Hindu festival as the bullish mood was bolstered by a stellar debut for Coal India.

The BSE Sensex index rose 2.1 per cent to 20,893.57, within sight of the record intra-day peak of 21,206.77 struck in January 2008.

The benchmark has gained 19.6 per cent so far this year, prompting some in the markets to warn that the market was starting to look overpriced.

Shares in Coal India soared to Rs342.35, nearly 40 per cent up from the offer price of Rs245 – much more than the market had expected.

The stock accounted for about 40 per cent of total volume traded on India’s two main bourses.

Financials were led higher by State Bank of India, up 4.9 per cent at Rs3,433.45, while Reliance Industries climbed 3.7 per cent to Rs1,105.05 and Tata Motors gained 4.1 per cent to Rs1,234.05.

Tokyo was driven higher by a wave of short-covering as the Fed’s move failed to spark a much-feared surge in the yen against the dollar.

There was also an element of the market playing catch-up with the rest of the region following a public holiday in Japan on Wednesday.

The Nikkei 225 Average rose 2.2 per cent to 9,358.78, pushing it further away from a recent seven-week low.

The broader Topix index – which struck a 19-month closing low on Tuesday – added 1.6 per cent to 816.33.

The stable tone of the yen helped push leading exporters higher. Canon rose 2.9 per cent to Y3,780, TDK gained 3.7 per cent to Y4,795 and Honda Motor finished 1.5 per cent higher at Y2,766. Panasonic added 1.8 per cent to Y1,160 after announcing that it had invested $30m in US electric carmaker Tesla Motors, extending an existing collaboration.

Strong quarterly profit helped Suzuki Motor rise 3.7 per cent to Y2,044 but cosmetics group Fancl tumbled 8.9 per cent to Y1,121 after cutting its earnings forecast on Tuesday.

Hong Kong maintained its upward momentum as investors grew increasingly optimistic that the Fed’s QE expansion would lead to greater capital inflows into the region. The Hang Seng index rose 1.6 per cent to a 29-month high of 24,535.63.

Property stocks recorded further gains with Sino Land jumping 6.1 per cent to HK$18.10 and New World Development up 4.7 per cent at HK$16.98.

Hopes that the QE move would also bolster economic growth in the US helped HSBC – which derives about a fifth of its revenue from North America – climb 3.6 per cent to HK$85.50.

Evergreen International, the men’s wear maker, jumped 26 per cent to HK$5.80 on its market debut.

In Shanghai, the Composite index rose 1.9 per cent to a seven-month peak of 3,086.94 as raw materials stocks attracted demand.

Shenhua Energy, the coal producer, rose 1.8 per cent to Rmb28.76 while PetroChina added 3.7 per cent to Rmb11.89.

In Australia, BHP Billiton rose 2.6 per cent to A$43.72 after the Canadian government blocked its $39bn bid for Potash Corp.

Qantas ended 0.7 per cent higher at A$2.89 after a choppy session. The carrier grounded all six of its Airbus A380 planes after one suffered an engine failure and was forced to land in Singapore.

The S&P/ASX 200 index rose 0.5 per cent to 4,745.30.