AFP/Tokyo

Asian markets rallied yesterday as fears of an attack on Syria receded after the US and Russia agreed a deal for the Assad regime to give up its chemical weapons.

Buying was also boosted and the dollar was lower after Larry Summers, the hawkish former treasury secretary tipped to be named Ben Bernanke’s successor as Fed chairman, withdrew from the race.

Trade remained cautious, however, before a two-day meeting at the US Federal Reserve at which policymakers are expected to begin winding down the bank’s stimulus programme.

Hong Kong climbed 1.47%, or 337.13 points, to 23,252.41 while Sydney ended 0.54% higher, adding 28.4 points to 5,248.0. Seoul finished up 0.96%, or 19.05 points, at 2,013.37.

However, Shanghai eased 0.22%, or 4.82 points, to 2,231.40 on profit-taking after last week’s healthy gains.

Manila rose 2.76% yesterday as investors snapped up bargain stocks. The 30-share composite index of the Philippine Stock Exchange gained 169.71 points to close at 6,302.71, from Friday’s finish of 6,133.24.

A total of 1.57bn shares worth 10.07bn pesos ($230mn) were traded. Gainers led losers 93 to 48, while 45 issues were unchanged.

Tokyo and Kuala Lumpur were closed for public holidays.

Attention this week is on Washington and the Fed’s plans for its $85bn a month bond-buying scheme. With most economists betting the bank will announce a reduction of its purchases, the key issue is how quickly and by how much it will “taper”.  Markets were taken somewhat by surprise after Summers decided to withdraw from the race to become the next Fed boss, citing fears of an “acrimonious” confirmation process.

The two other top contenders for the post — vice chair Janet Yellen and former vice chair Donald Kohn — were architects of the Fed’s bond-buying and supporters of the approach laid out by Bernanke. Summers was considered more hawkish towards the so-called quantitative easing scheme.

“Markets will take confidence from the view that a Yellen Fed is unlikely to put much pressure on economic growth rates by withdrawing monetary stimulus too soon,” Ric Spooner, chief market analyst at CMC Markets, told Dow Jones Newswires.

In afternoon forex trade the dollar bought ¥98.72 compared with ¥99.39 on Friday.

The euro was at $1.3359 compared with $1.3292 late on Friday, while it sat at ¥131.96, compared with 132.11.

On oil markets New York’s main contract, West Texas Intermediate for delivery in October, eased 51¢ to $107.70. Brent North Sea crude for November declined 55¢ to $111.15.

Gold was $1,316.10 an ounce at 1030 GMT compared with $1,314.40 late on Friday. 

In other markets, Bangkok added 3.14%, or 44.03 points, to 1,445.11; Jakarta ended up 3.35%, or 146.70 points, at 4,522.24; Singapore closed up 1.9%, or 59.18 points, at 3,179.48; Taipei rose 1.39%, or 112.86 points, to 8,255.34; Wellington rose 0.92%, or 42.68 points, to 4,693.62.