By BLOOMBERG
Asian stocks rose, with the regional benchmark index headed for its biggest weekly advance since April, amid optimism central bank stimulus and improving economic growth in the U.S. will buoy equities.
Miner BHP Billiton Ltd headed for its best four-day gain in 21 months in Sydney, tracking a surge in metals prices. Fast Retailing Co sank 6.2% in Tokyo after Asia’s biggest clothing retailer reported earnings declined. Newcrest Mining Ltd, Australia’s No. 1 gold miner, jumped 8% as the price of the precious metal headed for its steepest weekly surge in 21 months.
The MSCI Asia Pacific Index advanced 0.1% to 135.36 as of 11:19 a.m. in Hong Kong, extending its rally to 8.3% from a six-month low on June 25. The gauge climbed 3.1% this week as the Federal Reserve and the Bank of Japan signaled they will maintain measures to boost their economies.
“Monetary conditions are still very stimulatory and markets can get some comfort from that,” Chris Green, an Auckland-based strategist at First NZ Capital Ltd, a brokerage and wealth management firm, said by telephone. “Even though there is recognition that tapering is on the way, the market has got more confidence that it’s not touching the brakes, just easing off the accelerator. That will be supportive for equities for some time.”
Regional gauges
Japan’s Topix index rose 0.4% as the yen weakened against the dollar, with equity-trading volumes 3.9% above the 30-day average for the time of day.
The Topix is headed for its biggest four-week gain in more than four years. After plunging as much as 18% from a May 22 high, the gauge rebounded amid optimism Prime Minister Shinzo Abe will push through economic reforms following elections on July 21.
Australia’s S&P/ASX 200 Index advanced 0.6%, while New Zealand’s NZX 50 Index added 0.3%. Taiwan’s Taiex Index climbed 0.1%.
Singapore’s Straits Times Index sank 0.6% after a stronger that estimated expansion in its economy last quarter reduced pressure on the central bank to ease monetary policy.
Hong Kong’s Hang Seng Index slid 0.2% and China’s Shanghai Composite slid 0.5%. The Shanghai Composite fell 8.6% this year through yesterday as data from industrial production to exports pointed to a slowdown in the world’s second-largest economy and as money-market rates reached record highs last month.
China growth
Lou Jiwei
Chinese Finance Minister Lou Jiwei said a 6.5% economic-growth rate wouldn’t be a “big problem,” signaling the government may tolerate a slower pace of expansion than officials have previously indicated.
South Korea’s Kospi index retreated 0.5%. Hyundai Motor Co lost 4.7% to 211,500 won in Seoul amid concern that plans in China to increase the number of cities curbing auto purchases to fight pollution and congestion will threaten vehicle sales. Kia Motors Corp sank 4.7% to 58,600 won.
Futures on the Standard & Poor’s 500 Index fell 0.1% today. The US equities benchmark surged 1.4% to a record closing level yesterday as Federal Reserve Chairman Ben S. Bernanke backed sustained monetary stimulus.
The Fed has helped stoke a 32% advance in global stocks over the past three years as it suppressed interest rates through its asset purchases aimed at bolstering the economy. After signaling in May that the program could be reduced as risks to the US outlook abate, Bernanke said July 10 that “highly accommodative” monetary policy was needed for the foreseeable future.
The MSCI Asia Pacific Index traded at 13.3 times average estimated earnings yesterday compared with 15.2 for the Standard & Poor’s 500 Index and 13.2 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Miners jump
A gauge of raw-material producers rose 1.4%, the biggest advance among 10 industry groups on the MSCI Asia Pacific Index. The London Metal Exchange LMEX Index, a measure of commodities prices, gained 1.9% yesterday.
BHP Billiton rose 2.3% to A$33.60 in Sydney, a fourth day of gains. A close at this level would complete the biggest four-day gain since October 2011. Jiangxi Copper Co, China’s biggest producer of the metal, advanced 2% to HK$13.10 in Hong Kong. JFE Holdings Inc, Japan’s second-largest steelmaker, gained 2.4% to 2,482 yen. Newcrest climbed 8% to A$11.99, with gold on course for its best weekly advance since October 2011.
Bullet trains
CSR Corp, China’s biggest trainmaker, soared 11% to HK$4.87 after Shanghai Securities News reported the nation may start taking bids for bullet trains in the second half.
Fast Retailing, the firm run by billionaire Tadashi Yanai which comprises 10% of Japan’s benchmark Nikkei 225 Stock Average, sank 6.2% to 36,300 yen.
Operating profit at the retailer for the three months ended May fell to 27.4 billion yen (US$280 million) from 27.6 billion yen a year earlier, according to Bloomberg calculations derived from results provided by the Japanese company in a stock- exchange statement yesterday. That was below the average estimate of 35 billion yen from three analysts surveyed by Bloomberg.
Daphne International Holdings Ltd, a footwear maker that sells Aldo and Aerosoles shoes in China, slumped 13% to HK$5.03 in Hong Kong after saying it expects first-half profit will fall.
– Adam Haigh
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