Asia stocks gain on dollar strength; Europe down


AP and AFP

SEOUL/HONG KONG–Asian stocks rose Wednesday, boosted by strength in the dollar, but European markets fell and Wall Street futures were flat ahead of the release of minutes from the Federal Reserve’s last policy meeting.

Britain’s FTSE 100 fell 0.2 percent to 6,982.33 and Germany’s DAX dropped 0.5 percent to 11,796.19. France’s CAC-40 shed 0.4 percent to 5,098.08. Futures augured a tepid day for Wall Street. S&P 500 and Dow futures were both little changed.

The U.S. 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. The release of the minutes is a key event for markets as investors try to divine the timing of the U.S. central bank’s first rate hike since the global financial crisis.

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.

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.

Tokyo’s stock market hit a 15-year high as Seoul and Shanghai also rose, but Hong Kong and other Asian markets retreated after recent gains.

Tokyo rose 0.85 percent, or 170.18 points, to 20,196.56 �X its highest since April 2000 �X although car parts maker Takata plunged after a recall of U.S. cars fitted with the firm’s airbags doubled to 34 million. Seoul was up 0.88 percent, closing 18.69 points higher at 2,139.54, and Shanghai gained 0.65 percent, or 28.74 points, to 4,446.29. However Sydney ended marginally lower, giving up 5.2 points to 5,610.3, and Hong Kong lost 0.39 percent, or 108.49 points, to end at 27,585.05. Official Japanese data showed the economy grew 0.6 percent in the first three months of the year, after limping out of recession in the previous quarter. The figure was better than the revised 0.3 percent expansion in October-December and beat the market median forecast of a 0.4 percent quarter-on-quarter increase. Gold fetched US$1,208.82 compared with US$1,220.91 late Tuesday.