Asia stocks mostly rise as dollar gains after robust US data
SEOUL, South Korea (AP) — Asian stocks were mostly higher Wednesday as a rebound in U.S. home construction data and a surprise announcement by the European Central Bank to frontload bond buying sent the greenback higher, giving a boost to Asian exporters.
KEEPING SCORE: Japan's Nikkei 225 rose 0.7 percent to 20,170.51 and South Korea's Kospi gained 0.6 percent to 2,133.31. China's Shanghai Composite Index advanced 1.3 percent to 4,476.09. Stocks in Australia and in most Southeast Asian countries were higher. But Hong Kong's Hang Seng was down 0.3 percent to 27,629.50. Markets in Singapore and Taiwan were lower.
US DATA: The U.S. Commerce Department said housing starts last month increased 20.2 percent to a seasonally adjusted annual rate of 1.14 million homes. That pace ranked as the fastest clip since November 2007. The report that the U.S. homebuilders ramped up construction in April to the fastest pace in nearly seven-and-a-half years gave newfound momentum for an economy that has struggled in recent months.
ANALYST'S TAKE: "This makes a welcome relief from the run of generally soft data on the U.S. economy for March and April," Ric Spooner, chief analyst at CMC Markets, said in a commentary. "However, the good news on housing starts brings with it the prospect of rising interest rates."
EUROPE: Benoit Coeure, a top European Central Bank official, said the bank will boost May and June bond purchases intended to stimulate the eurozone's economic recovery, so the bank can buy less in July and August when bond market trading slows down. The purchases are aimed at raising the rate of inflation from zero, considered too low, toward the bank's goal of just under 2 percent. European stock markets rallied after the announcement while the euro depreciated and the dollar gained.
WALL STREET: The stock market slipped back from its latest record high. The S&P 500 lost 1.37 points to 2,127.83. The Nasdaq composite dipped 0.2 percent to 5,070.03. The Dow Jones industrial average edged up 0.1 percent to 18,312.39.
THE FED: The Federal Reserve is set to release minutes from its April 28-29 meeting, when it downgraded its view of the U.S. economy and offered no sign that a rate increase might be coming soon.
ENERGY: Benchmark U.S. crude gained 58 cents to $58.57 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $2.25 on Tuesday to close at $57.99. Brent crude, used to price international oils, rose 69 cents to $64.71 per barrel.
CURRENCIES: The dollar strengthened to 120.89 yen from 120.67 yen. The euro declined slightly to $1.1145 from $1.1147.