By Chao Deng
Stocks in Asia rallied after the European Central Bank unveiled
a bond-buying program aimed at shoring up the flagging eurozone
economy.
Gains were rippling across the globe, with Australia's
S&P/ASX 200 and Hong Kong's Hang Seng Index each up 1.2%.
Investors expect that Europe's bond-buying efforts will support
money flows to riskier investments, including to stocks. U.S.
stocks rose earlier.
The ECB said it would buy 60 billion euros a month in assets
including government bonds, debt securities issued by European
institutions and private-sector bonds. The move was largely
expected, although the size of the asset-purchase plan was larger
than many had forecast. Denmark's central bank cut its main
interest rate, underscoring how quickly the ECB's move is likely to
encourage easing across the region.
Chinese stocks rallied, despite the economy's weak start to the
year. HSBC's China flash manufacturing PMI report for January rose
to 49.8 from 49.6 in December, indicating continued economic
deceleration amid a slowing property sector.
The Shanghai Composite was up 1.4%, on track to finish up this
week and fully erase Monday's 7.7% plunge. Investors had taken
profit on concerns that tighter rules toward Chinese brokerages
would spell an end to a multi-month rally, but China's central bank
has also pumped more liquidity into the financial system in recent
weeks, spurring hopes that an easy monetary policy will bring gains
to the stock market.
In Australia, utilities and energy stocks led gains after a jump
in crude-oil prices. Woodside Petroleum Ltd. was up 1.7%, while
Origin Energy Ltd was up 2.2%.
Oil prices on the New York Mercantile Exchange were up 1.7% at
$47.13 after news that Saudi Arabia's King Abdullah bin Abdulaziz
al Saud died. A leadership transition in the world's largest oil
exporter could lead the kingdom and the Organization of the
Petroleum Exporting Countries to abandon their prior stance and cut
production, according to analysts.
Write to Chao Deng at Chao.Deng@wsj.com
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