BackAsian stocks advance to 6 week high as Chinese shares surge
The MSCI Asia Pacific Index added 0.9% to 139.8 in Hong Kong, posting its highest close since 8 December
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Singapore: Asian stocks advanced as technology and financial shares climbed ahead of a European Central Bank (ECB) meeting. Chinese shares jumped the most in more than five years.
Citic Securities Co. surged 6% in Hong Kong, pacing gains among Chinese brokerages. Air China Ltd. jumped 7.4% after UBS AG called the stock its top pick among mainland carriers. Konami Corp. climbed 6.8% in Tokyo after Goldman Sachs Group Inc. raised its rating on the game developer. Newcrest Mining Ltd., Australia’s largest gold producer, increased 4.1% as the price for the precious metal rose to a five-month high.
The MSCI Asia Pacific Index added 0.9% to 139.8 as of 7:01 pm in Hong Kong, posting its highest close since 8 December. Investors are looking forward to an ECB policy statement on 22 January when president Mario Draghi will probably announce a €550 billion ($635 billion) programme of quantitative easing, according to a separate survey.
“ECB probably won’t disappoint the market," Tim Radford, a strategist at Rivkin Securities in Sydney, said by phone. “We might see a stronger upside for equities if the ECB announces a bigger-than-expected QE. The rally in Chinese equities has been strong and it doesn’t look like its abating given expectations of further monetary easing in China."
The Shanghai Composite Index jumped 4.7%, the biggest advance since October 2009, adding to Tuesday’s 1.8% gain. The gauge plunged by the most in six years on Monday as the nation’s biggest brokerages were suspended from adding margin-trading accounts. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong increased 2.4%, while the benchmark Hang Seng Index added 1.7%.
Rally over
China’s world-beating stock rally is over, according to the latest Bloomberg Global Poll. Some 58% of the survey’s 481 respondents said the Shanghai Composite Index will either decline or remain little changed over the next six months after a 55% advance since June. China’s economic growth slowed to its weakest pace in 24 years and a real-estate developer’s failure to meet an interest payment is raising the specter of a pickup in debt defaults.
Australia’s S&P/ASX 200 Index climbed 1.6%. New Zealand’s NZX 50 Index and Taiwan’s Taiex index each added 0.7%. Singapore’s Straits Times Index gained 0.6%. South Korea’s Kospi index rose 0.2%.
Japan’s Topix index fell 0.5% as the yen strengthened as much as 1.2% against the dollar. The Bank of Japan on Wednesday announced it would maintain its monetary policy of increasing the monetary base at an annual pace of ¥80 trillion ($674 billion), as forecast by all 33 economists surveyed by Bloomberg. The central bank extended a lending facility to ¥10 trillion from ¥7 trillion in a bid to stoke inflation.
The Standard & Poor’s 500 Index rose 0.2% on Tuesday as US markets reopened after being shut on Monday for a holiday. The Nasdaq 100 Index climbed 0.4% as gains from Apple Inc to Netflix Inc. helped offset concerns global growth is slowing.
The International Monetary Fund on Tuesday made the steepest cut to its global-growth outlook in three years, with diminished expectations almost everywhere except the US more than offsetting the boost to expansion from lower oil prices. Projections for the euro area, Japan, China and Latin America were trimmed. Bloomberg
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