Asia stocks trace Wall Street gains on hopes of US bounce after poor 1Q GDP data

HONG KONG – Asian stocks rose Thursday, tracing gains on Wall Street, where shares shrugged off a poor quarterly economic report as a blip and instead factored in rebounding growth even as policymakers maintain ultralow interest rates.

Investors were unfazed by the U.S. government’s report that the world’s biggest economy shrank 2.9 per cent in the first quarter, the fastest rate since the global crisis five years ago.

But the downturn, due to a severe winter that closed factories, disrupted shipping and kept Americans away from malls, was seen as temporary, with growth rebounding sharply since spring. Investors may also be betting that it gives policymakers a reason not to raise rates.

“Weak U.S. data released overnight means the Fed will be in no hurry to tighten its policy stance,” strategists at Credit Agricole CIB said in a report. “Firmer U.S. equities will provide a favourable backdrop for trading” in Asia.

Japan’s Nikkei 225 edged up 0.1 per cent to 15,285.02 while South Korea’s Kospi added 0.4 per cent to 1,990.31.

Hong Kong’s Hang Seng jumped 0.9 per cent 23,083.41 while the Shanghai Composite Index in mainland China gained 0.5 per cent to 2,036.14. Australia’s S&P/ASX 200 rose 0.7 per cent to 5,440.70.

On Wall Street, the Dow Jones industrial average rose 0.3 per cent to close at 16,867.51 and the Standard & Poor’s 500 index rose 0.5 per cent to 1,959.53. The Nasdaq composite rose 0.7 per cent to 4,379.76.

In energy trading, the price of U.S. benchmark crude for August delivery rose 11 cents to $106.61 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents to settle at $106.50 on Wednesday.

In currencies, the dollar slipped to 101.74 Japanese yen from 101.81 in late trading Wednesday. The euro rose to $1.3635 from $1.3627.