Reply #14: Asia stocks gain on techs

[Ghost Dog]

HONG KONG (Reuters) - Asian stocks pushed back toward a six-month high on Thursday as technology shares resumed their rally, while Japan's surprisingly big stimulus spending and signs of stabilizing economic activity drove up government bond yields.

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Japan's Nikkei share average (Osaka:^N225 - News) jumped 3.7 percent after the government announced a bigger-than-expected stimulus package of $154 billion, or about 3 percent of GDP. The news hurt Japanese government bonds on worries about big supply to pay for the spending.

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The package will add to spending of 12 trillion yen already planned under previously announced stimulus measures, taking Japan's total stimulus spending to combat the global financial crisis to around 5.5 percent of GDP.

But the rally in shares, worries about bond supply and signs that some central banks may have finished cutting interest rates kept pushing up bond yields and swap rates across the region -- complicating the efforts of central banks to keep credit cheap.

The Bank of Korea kept rates on hold at 2 percent, a record low. The BOK said there was still room to cut rates but also that the economy was leveling off after its rapid decline.

The upbeat comments sparked a 4.3 percent rally in the KOSPI (KSE:^KS11 - News) to a six-month closing peak.

Some economic data around the region also provided hope for a recovery. Japanese core machinery orders posted a surprising increase of 1.4 percent in February from the previous month, while business surveys in China suggested the economy is steadying.

China remains the economic engine helping offset the collapse in exports across Asia thanks to its nearly $600 billion stimulus spending, which has spurred orders for technology goods across Asia.

"Recent data from China has been positive relative to expectations," said Patrick Bennett, Asia FX and rates strategist at Societe Generale in Hong Kong.

"The positive surprises in recent Australian, Korean, Taiwanese and Brazilian trade data have been underpinned by improving shipments to China."

Shares in tech-heavy Taiwan (Taiwan:^TWII - News) -- one of the best performing stock markets in the world this year -- helped lead the rise in Asia as companies such as contract chip maker UMC (Taiwan:2303.TW - News; NYSE:UMC - News) jumped on signs of improving demand.

The MSCI index of Asia-Pacific stocks outside Japan (^MIAPJ0000PUS - News) rose 3.2 percent, snapping a two-day fall and back near a six-month peak. Showing greater investor confidence, volumes rose on the hefty gains.

The MSCI index has now rebounded 31 percent from lows hit in early March.

/... http://finance.yahoo.com/news/Asia-stocks-gain-on-rb-14...