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Fed dividend approval to US banks boosts Asia stocks

Thursday 03.00 BST

Overview

Financial stocks rallied in Asia trade after the US Federal Reserve cleared big US banks for major payouts to shareholders, while a broad range of currencies continued to gain on the dollar following upbeat comments from the European Central Bank on Wednesday.

Hot topic

Bourses across the Asia Pacific region were rallying as financial stocks rose after the US Federal Reserve cleared big US banks to pay out almost all their earnings to shareholders this year.

In Hong Kong, HSBC Holdings was up 2.6 per cent, while AIA Group had notched a 0.7 per cent rise. Chinese state-owned banks ICBC and China Construction Bank climbed 1.2 per cent and 0.7 per cent, respectively. The benchmark Hang Seng index was up 0.8 per cent.

In Australia the financials segment had climbed 1.2 per cent, with National Australia Bank rising 1.6 per cent and ANZ up 1.5 per cent. The broader S&P/ASX 200 index was up 0.7 per cent.

Tokyo’s Topix index was up 0.6 per cent as financial stocks rose 1.6 per cent. Mizuho Financial had risen 2 per cent, while Nomura Holdings was up 1.5 per cent and Mitsubishi UFJ Financial climbed 2 per cent.

Forex

Virtually every major international currency was gaining on the dollar in morning Asia trade in a bout of volatility following Wednesday comments from European Central Bank governor Mario Draghi heralding the end of its asset purchase programme.

The South Korean won leading the pack with a rise of 0.5 per cent against the dollar to Won1,137.6.

The Australian dollar was up 0.3 per cent at $0.7662. The pound had risen 0.2 per cent to $1.2961 as had the euro, to $1.1405 — still the highest for the year. Japan’s yen had climbed just 0.1 per cent to ¥112.19.

The dollar index measuring the greenback against a basket of peers had dipped 0.1 per cent to 95.898, a seven-month low.

Fixed income

Government bonds in the region were flagging, with yield on the Australian 10-year sovereign note up 3 basis points at 2.485 per cent. Yield moves inversely to price.

Yield on 10-year Japanese government bonds was up 1bp at 0.055 per cent, while that on the equivalent New Zealand note was 6bp higher at 2.844 per cent.

Commodities

Oil prices were on track to rise for a sixth straight day in Asia trading. International benchmark Brent crude was up 0.3 per cent at $47.43 a barrel, while US marker West Texas Intermediate climbed the same amount to $44.88. Brent is up 4.2 per cent for the week to date.

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