Asia stocks advance as stimulus hopes buoy Tokyo
SYDNEY: Asian stocks rose toward their highest closing level since November as expectations for a stimulus package lifted Japanese shares and better-than-anticipated corporate earnings in the US eased concerns over global growth. Shares in Hong Kong entered a bull market.
The MSCI Asia Pacific Index gained 0.5 per cent to 134.50 as of 4:05 pm in Hong Kong. Japan’s Topix index advanced 0.6 per cent, resuming a rally after snapping a six-day advance on Wednesday. Japan’s government is considering 20 trillion yen ($187 billion) of stimulus, almost double its previous plan, to counter the possible effects of the UK’s decision to leave the European Union, Kyodo News reported, citing people close to the matter. Malaysian shares were the worst performers in the region as alleged fraud at a state investment fund returned to the spotlight.
The Asia Pacific gauge is trading near its highest level of 2016 after almost $5 trillion was added to the value of global shares since the post-Brexit low on June 27, as investors bet central banks and governments will do more to stimulate growth. The Dow Jones Industrial Average capped a ninth straight gain and the S&P 500 Index closed at a record, with technology shares pacing the advance.
“We have better corporate earnings, likely bold fiscal stimulus in Japan, zero interest rates helping to absorb every macro shock we hear about and broad monetary easing,” said Chris Weston, chief market strategist at IG Ltd in Melbourne. “If equity markets can’t rally in this environment they never will and really the key concern holding back fresh capital tions.”
Australia’s S&P/ASX 200 Index rose 0.4 per cent. South Korea’s Kospi index and Singapore’s Straits Times Index slipped 0.2 per cent. The Shanghai Composite Index rose 0.4 per cent and Taiwan’s Taiex Index added 0.5 per cent.
Hong Kong’s Hang Seng Index advanced 0.5 per cent, erasing its decline for the year and taking its increase from a three-year low in February to 20 per cent, the technical definition for a bull market. Real estate companies in Hong Kong, where borrowing costs tend to move in tandem with the US, have boosted the equity rally. is significantly elevated valua-
New Zealand’s S&P/NZX 50 Index climbed 0.6 per cent to a record high after the country’s central bank said further monetary easing is probably needed to lift inflation, reinforcing expectations of an interest-rate cut next month. The equity gauge has fallen only three days in the past 19 sessions and is the world’s best performing developed-market measure in 2016, up 14 per cent this year.
Kyodo reported that a Japanese government stimulus plan will include projects for 2017 and beyond. Prime Minister Shinzo Abe has kept markets guessing on the details of a much-anticipated fiscal package as economy minister Nobuteru Ishihara said he’ll compile measures later this month.
“If it’s actual stimulus and not just smoke and mirrors, it certainly will help,” Shane Oliver, Sydney-based global investment strategist at AMP Capital Investors Ltd, which manages more than $110 billion, told Bloomberg Radio’s First Word Asia. “It certainly would be a huge stimulus programme. This is what’s been lacking in Japan over the last few years. There hasn’t been a lot apart from monetary stimulus.”
The FTSE Bursa Malaysia KLCI Index dropped 0.6 per cent, the most since June 16. US prosecutors said they plan to seize assets after more than $3.5 billion was misappropriated from 1Malaysia Development Bhd, a state development fund known as 1MDB that was previously headed by Prime Minister Najib Razak. Singapore said it seized S$240 million ($177 million) in assets linked to the alleged fraud.
India’s S&P BSE Sensex fell 0.5 per cent after changing seven times.
The gauge is up 22 per cent from a low in February as foreign funds added to purchases of local shares amid signs of an improving economy. direction at least