SEOUL, South Korea (AP) — Asian markets continued gains on Tuesday as U.S. stocks extended rallies on growing optimism over the U.S. economy. Trading volumes remained light ahead of Christmas.
Stock markets enjoyed a strong run over the past few days as investors cheered data showing that the U.S. economic recovery is gaining strength. Positive economic figures on the world's largest economy helped ease concerns about the impact on emerging markets from the Federal Reserve's scaling back of its stimulus programs.
A batch of upbeat reports on the U.S. economy strengthened optimism one day before Christmas. International Monetary Fund chief Christine Lagarde said the Washington D.C.-based institution would raise its 2014 U.S. growth forecast from the current estimate of 2.5 percent, citing more certainty in 2014. Her remarks came after Friday data showed the U.S. grew at an annualized rate of 4.1 percent in the third quarter of the year, up from the previous estimate of 3.6 percent.
In data released Monday, the U.S. Commerce Department said consumer spending rose 0.5 percent in November, supporting the view that American consumers may be making a comeback.
Tokyo's Nikkei 225 index advanced 0.8 percent to 15,996.88, after touching above the 16,000 level for the first time in six years in the morning session. China's Shanghai Composite added 0.7 percent to 2,104.66. Hong Kong's Hang Seng index gained 1.1 percent to 23,179.55. In Hong Kong, stocks of China Mobile Ltd. rose 0.5 percent boosted by its deal to sell iPhones in China.
South Korea's benchmark Kospi advanced 0.5 percent to 2,006.17. Shares in Singapore, Australia and New Zealand also rose.
Earlier in the U.S., stocks closed on a positive note with the news of Apple's iPhone deal in China pushing up tech stocks. The Dow Jones industrial average and the Standard & Poor's 500 index rose 0.5 percent on Monday. The Nasdaq composite gained 1.1 percent.
Stock markets have largely held their own despite tensions in China's credit markets. Even though the Chinese monetary authorities have injected more cash into the markets, the rate banks charge each other for 7-day loans spiked to 9.8 percent at one point Monday, up from 4.3 percent at the start of the month.
Analysts said the main reason why interbank lending rates have gone up is that Chinese banks are building up their cash reserves in order to meet tighter regulatory requirements. The increase has also come as the Fed has ended months of speculation and begun "tapering" its stimulus.
For now, most analysts don't think it's a major cause for concern but developments in China's credit matters will be monitored carefully over the coming days and weeks.
"This matters for China as it was a big recipient of Fed liquidity in recent years," said Kathleen Brooks, an analyst at Forex.com. "China is the world's second-largest economy. If it looks vulnerable as we start the New Year then the rest of the world should be getting nervous."
If rates don't fall, then the fear would be that China experiences tougher credit conditions in the months ahead and that could potentially weigh on economic growth — one of the main pillars of the global economic recovery over the past few years.
Elsewhere, trading was fairly muted. In the currency markets, the euro was 0.1 percent weaker at $1.3677 while the dollar rose 0.2 percent to 104.35 yen. In the oil markets, a barrel of benchmark crude was 41 cents lower at $98.91.
AP writer Toby Sterling contributed to this story from Amsterdam