HSI Gains As Tokyo Leads An Asian Recovery

Hong Kong stocks rallied more than 1 percent in the morning session on Friday, boosted by fresh hopes of a steep interest rate cut by the Federal Reserve.

The Hang Seng Index climbed 1.1 percent, to 28,772 by the break.

On the mainland, the Shanghai Composite Index gained more than 1 percent, to 2,930, while the Shenzhen Composite Index soared 1.2 percent, to 1,566.

Tokyo went into the break 1.7 percent higher.

Seoul and Taipei also added one percent, while Sydney climbed 0.8 percent, Singapore put on 0.4 percent, Wellington added 0.3 percent and Manila advanced 0.6 percent.

However, Jeffrey Kleintop, chief global investment strategist at Charles Schwab & Co, warned that weakness in the world economy would eventually drag on markets.

"I don't think a few rates cuts is going to make the difference, whether it's 25 or 50 basis points at the end of this month," he told Bloomberg TV. "While the bond market is pricing in a realistic probability of the slowdown, stocks have gone the other direction this year and may be in for a surprise."

Bets on lower rates were also providing support to higher-yielding, riskier currencies with the Australian dollar and South Korean won climbing 0.6 percent and the Indonesian rupiah 0.5 percent higher. South Africa's rand, the Turkish lira and Mexican peso were also well up.

However, the greenback did claw back slightly against its major peers following steep losses on Thursday. (AFP)

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