Some Asia equity traders have greeted U.S. stocks' best rally since 2009 — and subsequent strong gains in Japanese shares — with the conviction that this is more a turning point than a dead cat bounce.
The Topix index surged 4.9 percent and the Nikkei 225 stock average jumped 3.88 percent on Thursday, following an almost 5 percent advance in the S&P 500 Index. Market observers pointed to economic conditions in the U.S., which they say don't justify the December equities rout. Any doubts about the health of the American economy were called into question during the Asian night, when Amazon.com Inc. surged 9.5 percent after reporting record holiday sales.
"The recovery should put to rest the feverish fear-mongering that had investors believing the investment world as we know it was coming to an end," said Stephen Innes, head of Asia-Pacific trading at Oanda Corp. "The fear mongering and doom-and-gloom prophecies were not based on current U.S. economic fundamentals," he said. "There's a lot of money parked on the sidelines. So bargain hunters came back with a bang, but it's a stark reminder never to underestimate the purchasing power of the U.S. consumer."