The MSCI Asia Pacific Index climbed 2.2% to 141.83 as of 4.14pm in Hong Kong, poised for the highest close since May 22 and biggest daily advance since Sept 7, 2012. All 10 industry groups on the gauge increased. Markets in mainland China, South Korea, Taiwan and Sri Lanka are closed for holidays. Standard & Poor’s 500 Index futures added 0.3% after the gauge climbed to a record in New York on Wednesday night.
The Stock Exchange of Thailand main index went up 3.24% or 49.93 points to close at 1,489.06 points at the end of afternoon trading. Trading value went up to 82.71 billion baht on Thursday, more than double Wednesday’s trade, which stood at 40 billion baht.
The baht also rose the most since January 2007 to below 32 baht to the dollar. The local currency on Thursday, however, strengthened at a slower pace than Indonesia's rupiah, India's rupee, and Malaysia's ringgit, which have all suffered big losses recently.
The Federal Open Market Committee said it wants more evidence that improvement in the US economy will be sustained before slowing the pace of its $85 billion in monthly asset purchases. Analysts had predicted a $5 billion reduction, according to estimates compiled by Bloomberg. Tapering could begin later this year should the data confirm the Fed’s “basic outlook,” Chairman Ben S. Bernanke said.
“It’s taper off, risk on,” Keith Poore, head of investment strategy at AMP Capital Investors Ltd. in Wellington, which manages about $130 billion, said by telephone. “Ultimately it will be supportive for markets. You want to hold on to your risk positions if you have them at the moment. We take it as a positive, as it’s definitely dovish.”
Japan’s Topix index rose 1.9% to its highest close in eight weeks, with a report showing the nation’s exports jumped the most since 2010 in August from a year earlier. Australia’s S&P/ASX 200 Index gained 1.1% to a five-year high. New Zealand’s NZX 50 Index climbed 1.1% to a record. Hong Kong’s Hang Seng Index added 1.7% to its highest close since Feb 4, and Singapore’s Straits Times Index surged 1.9%.
Philippine stocks climbed to a four-week high and the peso strengthened the most in more than three years. The Philippine Stock Exchange Index jumped 2.8% to 6,511.70 in Manila, the highest close since Aug 20. The peso rose the most since May 2010, increasing 1.1% to 43.06 per dollar at 2.57pm, according to Tullet Prebon Plc.
The Jakarta Stock Exchange Composite Index was the biggest gainer in the Southeast Asia region, jumping 4.65%.
Indian equities climbed to a three-year high, led by banks and carmakers. The S&P BSE Sensex increased 3.3% to 20,625.55, according to preliminary closing prices in Mumbai, the highest close since November 2010.
In Europe, the Stoxx Europe 600 Index rallied 1% to 316.26, the highest level since June 2008, at 10.18am in London. The equity benchmark has gained 6.4% so far this month, extending its advance this year to 13%, as central banks pledged to maintain stimulus measures to support the global economy. Standard & Poor’s 500 Index futures increased 0.4%.
“I’m a bit surprised by the Fed’s decision to postpone tapering,” said Pierre Mouton, who helps oversee $6 billion as a portfolio manager at Notz, Stucki & Cie. in Geneva. “It’s possible that the Fed is afraid of seeing the housing recovery jeopardised. Investors were pricing in a taper, hence the upside reaction in markets today. It is not surprising, as investors have become addicted to liquidity.”
The volume of shares changing hands in Stoxx 600-listed companies was 53% greater than the 30-day average, data compiled by Bloomberg show. The VStoxx Index, a measure of expected volatility in euro-area stocks, slid 4.9%.