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Asian shares rose to a two-month high and the euro firmed on Thursday after news that the International Monetary Fund was seeking to boost its resources to tackle the euro zone debt crisis helped ease worries about Europe's funding difficulties. Smooth debt sales by Portugal and above-estimate earnings from Wall Street powerhouse Goldman Sachs Group Inc (GS.N) added to the positive mood, just as investor risk-aversion had started to weaken after assets posted gains early in the new year.
Japan's Nikkei average (.N225) rose 1.3 percent, hitting a five-week high. (.T) Markus Rosgen, head of Asia strategy at Citigroup in Hong Kong, said the recent resilience in equities suggests a rebalancing from last year's extreme risk-aversive stance, which could leave fund managers underperforming if prices kept rising.
Hong Kong shares rose on Thursday following a strong close on Wall Street, which was lifted by financials, a sector also in focus in local markets after China's central bank took steps to battle a money squeeze ahead of the Lunar New Year.
The People's Bank of China injected cash into the financial system through reverse bond repurchase agreements ahead of the holidays, starting next week, which are normally a period of heavy bank withdrawals by firms and households.
Chinese banking stocks, among the most heavily weighted on Hong Kong's bourse, were the main beneficiaries of the move. The Hang Seng index was up 155.54 points or 0.79 per cent at 19,842.46.
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