Asian markets rebound from big losses

Asian markets rebound from big losses

HONG KONG - Asian markets climbed Tuesday following a big sell-off in the previous session and as traders took heart from a rally on Wall Street that saw the Dow close within sight of a record high.

Shanghai failed to make noticeable inroads into Monday's huge losses as China's annual parliamentary gathering kicked off, where outgoing Premier Wen Jiabao outlined the country's economic targets for the year.

Tokyo added 0.75 per cent by the break, Hong Kong rose 0.42 per cent, Sydney was 1.48 per cent higher, Shanghai was up 0.62 per cent and Seoul advanced 0.56 per cent.

Investors cheered a positive lead from New York, where the Dow rose 0.27 per cent to 14,127.82, within 40 points of an all-time high seen in October 2007.

Remarks from the Federal Reserve's number two official reaffirming its aggressive stimulus policy provided support to US shares.

Janet Yellen, vice chairwoman of the Fed board of governors, said in a speech that the central bank intends to "keep monetary policy highly accommodative until well into the recovery".

The S&P 500 gained 0.46 per cent and the Nasdaq was up 0.39 per cent.

Traders also appeared to shrug off the lack of action in Washington on dealing with the "sequester" of US federal spending cuts that came into effect on Friday and which could shave around 0.5 percentage points off growth.

Analysts said the effect of the US$85 billion (S$105 billion) in cuts would not be seen yet, giving politicians a little time to agree a less stringent budget that would help slash the country's deficit.

On currency markets the dollar bought 93.40 yen in early trade against 93.46 yen in New York late Monday.

The euro fetched 121.65 yen and US$1.3030 compared with 121.74 yen and US$1.3024.

In China, dealers were looking to the National People's Congress, which opened Tuesday with Wen saying the government would target growth of 7.5 per cent for the world's number two economy in 2013 and 3.5 per cent inflation.

"We should energetically change the growth model," Wen said in his last address amid demands that China revamp its investment and export-led growth in favour of domestic spending.

A separate government document laid down a 10.7 per cent rise in defence spending to 720.2 billion yuan ($115.7 billion) in 2013.

While Shanghai began the day on a high the gains were not enough to clear the 3.65 per cent loss suffered Monday when property and construction stocks were sold after the government set out rules aimed at capping house prices.

Oil prices rose, with New York's main contract, light sweet crude for delivery in April, adding 21 cents to US$90.33 a barrel and Brent North Sea crude for April delivery increasing 24 cents to US$110.33.

Gold was at US$1,578.60 at 0230 GMT compared with US$1,577.65 late Monday.

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