Asian stocks hit 2009 highs

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Asian stocks hit 2009 highs

Asian shares swept to their highest levels for 2009 on Wednesday after upbeat US economic news boosted riskier assets leveraged to global growth, while the US dollar slipped to a one-year low.

Commodities also benefited from the wave of optimism, with gold spiking to an 18-month high above $US1016 an ounce and crude oil briefly climbing above $US71 a barrel.

Most major Asian stock indexes posted gains of 1 per cent or more in the wake of Tuesday's strong reading on US retail sales, with exporting countries leading the way.

South Korea's KOSPI climbed 1.8 per cent to a 15-month closing peak, while Australia's resource-packed S&P/ASX 200 index jumped 2.4 per cent to an 11-month high.

"The sentiment is phenomenal. Right across the board it's green as a vegetable garden in spring," said Michael Heffernan, senior client adviser and strategist, Austock Group in Sydney.

"It's chalk and cheese compared to a year ago when there was no confidence. Now people are gradually getting confidence back. The sentiment and the ambience of the market is decidedly upbeat," he said.

While Heffernan was referring to the Australian market, his sentiment seemed to be shared across the region.

The MSCI index of Asia-Pacific shares excluding Japan rose 2.1 per cent to its highest this year. The MSCI benchmark is now up about 53.5 per cent for the year.

Investors even managed to look past a 1 per cent decline in the volatile Shanghai market, virtually the only regional market to ease on Wednesday.

Japan's benchmark Nikkei added a more modest 0.5 per cent, restrained in part by uncertainty over the economic policies of the new government.

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Japan's new prime minister, Yukio Hatoyama, takes office on Wednesday and is set to announce his cabinet line-up after a huge election win.

The Bank of Japan began a two-day policy meeting, but analysts weren't holding their breath for the outcome given rates are already near zero and policymakers are reluctant to go any further with exceptional easing measures.
The gains for Asian stocks came courtesy of better US news.

US retail sales jumped 2.7 per cent in August, the fastest growth in 3-1/2 years, data showed on Tuesday.
Federal Reserve Chairman Ben Bernanke felt confident enough to declare the US recession "very likely over", though he added that the recovery would be very slow.

The rise in sales added to expectations US economic growth would stage a sizable rebound in the third quarter, thanks in part to businesses rebuilding inventories to meet demand.

That in turn augured well for the exporting nations of Asia and their currencies, especially those of big commodity producers such as Australia.


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