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Asia markets rise on hopes for central bank action

Asian markets mostly rose Tuesday and the euro firmed on hopes that central banks in the United States and Europe would take action to boost their sluggish economies after a stream of negative data.

Regional bourses shrugged off a lacklustre performance on Wall Street, as investors hoped the Federal Reserve would take stimulus measures after weak US manufacturing data, and that the ECB would cut rates at a meeting on Thursday.

Tokyo closed up 0.70 percent, or 63.11 points, at 9,066.59, and Seoul ended 0.87 percent, or 16.17 points, higher at 1,867.82.

Hong Kong closed up 1.51 percent, or 294.07 points, at 19,735.53, while Shanghai edged up 0.14 percent, or 3.08 points, to end at 2,229.19.

Sydney finished down 0.14 percent, or 5.80 points, at 4,127.2, although analysts said a central bank decision to keep interest rates on hold at 3.50 percent after two recent cuts had little effect on the market.

The euro edged up against the dollar and yen, as investors turned their attention to the European Central Bank meeting after eurozone data raised hopes of a cut in the main interest rate from the current record low of 1.0 percent.

“Expectations for a rate cut by the ECB are rising, with the market starting to factor in that possibility,” said Credit Suisse chief equity strategist Masaru Ohnishi.

On Monday in the United States, data from the Institute for Supply Management showed manufacturing contracted for the first time in almost three years in June.

But US stocks finished mixed as hopes rose that the latest weak economic report from the world’s biggest economy might spur the Fed into a third round of monetary stimulus, known as quantitative easing.