HONG KONG (Nikkei Markets) -- Asian shares outside of Japan advanced for the third straight session on Thursday, boosted by China cutting tariffs on U.S. imports and the S&P 500 Index's record highs.
The Nikkei Asia300 index of companies outside Japan rose 1.8% to 1,372.45, adding to the 3% gain witnessed in previous two sessions. Chinese companies were the biggest contributors to Thursday's advance. Bank of China rose 2.3%, leading lenders higher. China Life Insurance added 3.4% and Tencent Holdings gained 2%. Air China surged 7% to pace the rally among airlines. China Vanke advanced 3% following a 12.3% increase in January contracted sales from a year earlier. An index of Chinese companies in Hong Kong jumped 2.6%.
The S&P 500 Index rose more than a percent yesterday after data showed a pickup in growth in the U.S service activity and a jump in jobs created by the private sector. U.S. private employers added 291,000 jobs in January, significantly higher than what economists had expected, and the ISM service sector index rose to 55.5 from 55 in December. Yesterday's data comes on the back of the ISM manufacturing numbers that indicated an unexpected growth in U.S. manufacturing activity last month.
Jeffrey Halley, a senior market analyst at OANDA, said that another piece of impressive U.S. data led by the "blowout" private job numbers are helping concerns regarding the China virus "recede further in the minds" of investors.
The recovery in risk appetite for Asian equities was further boosted when China halved tariffs on $75 billion of U.S. imports starting February 14. The step was taken for the healthy and stable development of the China-U.S. trade, CNBC reported.
Meanwhile, earlier Thursday, the Philippine central bank cut the rate on the benchmark rate by 25 basis points to 3.75%. Nine out of the 11 economists surveyed by Reuters had expected the outcome. Meanwhile, India's Monetary Policy Committee left the key rate unchanged amid worries over the inflation outlook.
Central banks in Asia have come under focus amid calls to take steps to keep in check the economic fallout from the coronavirus which has killed more than 550 people. The Bank of Thailand yesterday cut rates by a quarter percentage points and the Monetary Authority of Singapore said there was room for easing. China's central bank earlier this week reduced the reverse repo rate and injected liquidity.
In other movers on the A300, Korean Air Lines rose 3.8%. The airline said Thursday that it will sell a property in Seoul and one of its non-core business units with a view to improving financial stability, Reuters reported.
KT Corp. added 2% after South Korea's largest telephone company reported a 55% increase in December quarter operating profit.
Cipla declined 1.6% after the Indian drugmaker reported a 6% year-on-year increase in December quarter net profit.
Energy related shares were boosted by Brent crude futures heading higher for a second day following a 2.4% increase on Wednesday. China Petroleum & Chemical rose 3.6%, CNOOC added 5%, and PTT Exploration and Production climbed 0.8%.