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There was no stopping Australian stocks on Thursday as a stunning set of domestic jobs data heightened the mood of confidence in the market and fuelled talk of further interest rate rises in the months to come.
The S&P/ASX 200 index jumped 1.6 per cent to a fresh one-year high of 4,768.6, taking its advance to more than 4 per cent since the close on Monday – the day before the Reserve Bank of Australia’s surprise decision to raise rates by a quarter-point from a record low of 3 per cent.
The sense that the nation’s economy was on the road to recovery intensified after news that 40,600 jobs were created in September, compared with expectations of a 10,000 drop. That pushed the jobless rate down from 5.8 per cent to 5.7 per cent.
“All of this has clearly raised expectations about RBA tightening,” said Steve Barrow at Standard Bank. “There’s more talk of rate hikes in both November and December. We doubt this – but we don’t doubt that the Aussie [dollar] is likely to go up and challenge parity against the [US] dollar.”
The Australian currency touched a fresh 14-month high above $0.90 on Thursday.
Banks led the stock market’s advance on optimism that bad debt levels might not be as bad some had feared. National Australia Bank rose 4.4 per cent to A$31.35 and ANZ Banking 3.7 per cent to A$24.74.
The mood of optimism in Australia filtered out across the rest of the region.
In Hong Kong, the Hang Seng index rose 1.2 per cent to 21,492.90 ahead of the resumption of trading in mainland markets on Friday. Shanghai has been closed for national holidays for the past week.
Index heavyweight HSBC climbed 1.8 per cent to HK$89.10 as it resumed talks to acquire Royal Bank of Scotland’s Asian units.
Real estate stocks also did well due to optimism that property prices would rise next year. Sino Land gained 3.2 per cent to HK$15.02 and Sun Hung Kai 2.9 per cent to HK$116.20.
It was a better day for market debutantes as investors shrugged off the weak reception given to new issues recently. Yingde Gases rose 12 per cent from its initial public offering price to HK$7.84, Ausnutria Dairy 27.5 per cent to HK$5.11 while Jiangchen International surged 110 per cent to HK$0.63.
Seoul also advanced as worries about a possible rate rise on Friday from the Bank of Korea eased. The Kospi index ended 1.1 per cent higher at 1,615.46, even as foreign investors turned net sellers once again.
Hynix Semiconductor rose 4.9 per cent to Won19,300 following a bullish broker note.
Tokyo underperformed the region, with the Nikkei 225 Average edging up 0.3 per cent to 9,832.47 and the broader Topix index closing 0.2 per cent higher at 887.59.
Concerns about the recent strength of the yen limited the market’s gains, although exporters’ shares enjoyed a modest rebound. Honda Motor added 1.3 per cent to Y2,675 and Panasonic 2.1 per cent to Y1,255.
Nikon rose 4 per cent to Y1,598 following positive broker comments. Shipping stocks also gained on the back of broker upgrades, with Nippon Yusen up 7.3 per cent at Y368.
Taipei bucked the firmer trend in the region as it backed away from Wednesday’s 16-month high. The weighted index fell 1.4 per cent to 7,503.31, with tech stocks leading the way.
UMC, the contract chipmaker, fell 3.1 per cent to T$15.40 and rival Taiwan Semiconductor Manufacturing shed 1.9 per cent to T$60.90.