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Recovery hopes fuel Asian rally

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Tokyo paces advance as international funds reallocate assets

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Stock markets across Asia rose sharply yesterday, as clearer signals on the global economic recovery prompted international investors to reallocate assets, but Hong Kong and New Zealand were left out of the rally.

The Japanese and South Korean markets hit 14-month highs as global investors sought out high-yielding assets. The Nikkei-225 Index rallied 3.15 per cent while the Korea Composite Index rose 0.61 per cent.

Hong Kong and New Zealand faltered, with the Hang Sang Index slipping 0.05 per cent and the NZSE Capital Index dropping 0.45 per cent.

Markets players said the regional rally was prompted by overseas investors positioning themselves for a cyclical upward turn in the global economy, led by the United States. Asia markets were expected to be among the biggest beneficiaries of the pick-up.

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US consumer spending data showed a rebound of 0.8 per cent in July, led by higher sales of cars and other durable goods.

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