Asian Shares End Higher On Fed; Commodity Plays Gain

Asian markets ended higher Thursday after the U.S. Federal Reserve indicated the worst was over for the U.S. economy, with resource stocks especially strong on higher metal and crude-oil prices.

Indian stocks rallied as investor sentiment remained high after an unexpectedly strong industrial output in June. India's index for industrial production expanded 7.8% from a year earlier in June, after a 2.2% increase in May.

Japanese, Chinese and Hong Kong stocks ended higher, but put on less than they lost Wednesday, with some analysts unsure the day's advance could be sustained.

Although some people think the U.S. economy is stabilizing, "what makes the market nervous is that it's already risen to high levels and there is still a chance for the Fed to change its monetary policy," said Linus Yip, strategist at First Shanghai Securities.

Japan's Nikkei Stock Average of 225 companies gained 0.8% to 10,517.19, China's Shanghai Composite rose 0.9% a day after it slumped 4.7%, and Hong Kong's Hang Seng Index advanced 2.1%, less than Wednesday's 3.0% decline.

India's Sensex rose 3.1% to 15,488.59 in the afternoon, still cheering the 7.8% on-year jump in June industrial output reported Wednesday.

Australia's S&P/ASX 200 ended up 2.1%, New Zealand's NZX 50 added 1.6%, South Korea's Kospi slipped 0.1% and Taiwan's Taiex rose 2.0%. Singapore's Straits Times closed up 1.7%, with Indonesia's main index ended 2.1% higher, Thailand's SET Index was 1.3% higher and Philippine shares were up 1.0%.

UBS analysts noted in a report that Asian markets, excluding Japan, had outperformed the MSCI World index by 37% in the last six months. But they added that although regional fundamentals still looked good, "from a liquidity perspective, a period where Asia performs relatively less well compared to the rest of the world would seem plausible."

U.S. futures were pointing toward another higher opening after Wednesday's gains on Wall Street, with Dow Jones Industrial Average futures up 81 points in screen trade recently.

Commodity plays powered ahead across the region on higher London Metal Exchange base metal prices and anticipation of higher oil prices.

Yunnan Copper jumped by the daily limit of 10% in Shenzhen, with Jiangxi Copper up 8.6% in Shanghai and 3.9% in Hong Kong. Pacific Metals rose 4.1% in Tokyo, Santos was up 3.3% and Alumina gained 3.1% in Sydney, while in Mumbai trading, Tata Steel and Hindalco Industries were both up 3.1%. link.....