Asia-Pacific stocks climb to a two-week high
Asian stocks climbed as Shanghai equities rallied to a nine-month high and investors braced for a busy week of earnings across Japan, China and the United States.
The MSCI Asia Pacific Index rose 0.4 percent to 140.27 as of 4:10 pm in Hong Kong, set for a two-week high. The measure capped its best week in a month last week as data showed Chinese economic growth is stabilizingand investors weighed the outlook for higher US borrowing costs. More than 350 companies on Japan’s Topix index will release quarterly updates this week. In Hong Kong, reports include those from Industrial & Commercial Bank of China Ltd at the end of the week.
“Earnings is the key metric for investors,” said Matthew Sherwood, head of investment strategy at Perpetual Ltd in Sydney, which manages about $21 billion. “Meanwhile, there are a number of important macro events which are holding the market back, including the US election early next month and key Fed and ECB meetings in December.”
The Asian gauge has failed to break above its most recent high on Sept 22 as uncertainties including the US presidential election on Nov 8 and the trajectory for stimulus from the Federal Reserve and the European Central Bank weigh on investors’ minds. The measure now trades at 14.5 times projected earnings, compared with its three-year average multiple of 13.6.
San Francisco Fed President John Williams is the most recent official to comment, saying that slow growth is probably “here to stay” and repeating his support for a gradual increase in rates “sooner rather that later.” The odds the Fed will act by December climbed to 68 percent last week.
The Shanghai Composite Index rose 1.2 percent to the highest close since Jan 8 amid optimism that the government will boost infrastructure spending and speed up an overhaul of State-owned companies. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong gained 1.7 percent.
1.2 percent the gain in the benchmark Shanghai Composite Index on Monday