Asia markets opened sharply higher on Wednesday, with most major indexes advancing around than 1 percent each, after encouraging reports on the housing market stateside saw gains in US stocks.

Japan's Nikkei 225 was up 1.6 percent, with shares receiving additional boost from a relatively weaker yen against the dollar. Across the Korean Strait, the Kospi advanced 0.82 percent.

Down Under, the benchmark S&P/ASX 200 was up 1.39 percent, led by gains in the heavily-weighted financials subindex, as well as the energy and materials sub-indexes.

US stocks ended higher overnight, with the Dow Jones industrial average closing up 1.22 percent, the S&P 500 higher by 1.37 percent and the Nasdaq composite added 2 percent.

New home sales for April jumped 16.6 percent to a seasonally adjusted annual rate of 619,000 units, topping expectations and the highest level since January 2008, reported Reuters.

In the currency market, the dollar regained momentum, advancing against most major currencies. The dollar index, which measures the greenback against a basket of currencies, traded at 95.65, compared with its previous close at 95.23. This was compared to the 94 level the index traded at in the previous week.

Kathy Lien, managing director for foreign exchange strategy at BK Asset Management, said the positive home sales data "validated the Federal Reserve's hawkish monetary policy stance."

"As more central bankers say that two or more hikes in 2016 is likely the more investors start to realize that they are underestimating the Fed's commitment to normalizing monetary policy," she said.

The Japanese yen weakened against the dollar, with the pair trading at 110.06 as of 8:15 a.m. HK/SIN.

Major Japanese export stocks were higher, with Toyota shares adding 1.64 percent, Nissan up 1.58 percent and Honda gaining 1.93 percent. A weaker yen is a positive for exporters as it increases their overseas revenue when converted into local currency.

Lien added that she expected "the dollar to extend its gains and look for dollar/yen to head towards 112," as the market continued to price in its expectations for an imminent rate hike from the Fed.

Oil prices advanced in early Asian hours on Wednesday, with global benchmark Brent futures up 1.05 percent to USD 49.12 as of 8:23 a.m. HK/SIN. US crude futures added 1.17 percent to USD 49.19.

Overnight, oil prices jumped after data from the American Petroleum Institute showed US crude inventories fell 5.1 million barrels last week, beating expectations from analysts, according to Reuters.

In company news, Sony shares advanced 5.01 percent, after the company released its earnings forecast for the fiscal year ending March 31, 2017. Sony said it expected operating income to come in at 300 billion yen (USD 2.72 billion) for fiscal 2017, a 2 percent increase from the 294.2 billion yen for the year ended March 31, 2016.

The company said the earthquakes that hit southern Japan in April disrupted operations prevented them from making earnings forecast earlier.

Share Market Live

NSE

First Published:May 25, 2016 7:51 AM IST