HK paces regional gains after economic reports spark surge on Wall Street

Asian stocks rallied yesterday after reports showed the United States economy was growing rapidly with little inflation, boosting hopes regional exporters would see increased demand for goods.

Hong Kong saw the region's biggest percentage gains, with the Hang Seng Index rising 3.9 per cent to 13,256.95 points on a turnover of $9.82 billion.

The Philippine Composite Index was next with a gain of 3.4 per cent to 2,036.05 points.

Japan's Nikkei-225 Index saw the biggest gains in market capitalisation as it put on 3.03 per cent to 17,942.08 points, its biggest rise in almost six months.

'It's a very good environment for equities,' Pacific World Asset Management's investment director in Hong Kong, Chris Choy, said. 'I think in the coming months, there's no excuse to adjust interest rates.' In a speech on Thursday, US Federal Reserve chairman Alan Greenspan said the economy was likely to stay on a sustainable, non-inflationary path. Meanwhile, data showed employment costs were increasing only gradually even as economic growth continued to barrel along.

Analysts believed Mr Greenspan's speech did not indicate he was ruling out a further interest rate increase at the Fed's next policy meeting on November 16, but market reaction showed investors believed the US economy could absorb another rate rise.