Asian stocks rose, extending the longest rally in the benchmark index this year, as China’s industrial production and retail sales beat estimates, adding to signs the world’s second-largest economy is rebounding.
Jiangxi Copper Co. (358), China’s biggest producer of the metal, gained 3 percent in Hong Kong. Komatsu (6301) Ltd., Japan’s No. 1 construction-equipment maker, climbed 6.4 percent after the Nikkei newspaper reported operating profit from its parts business will climb to a record this year. Mitsui O.S.K. Lines Ltd. jumped 6 percent in Tokyo, pacing gains among shipping companies after a gauge of cargo rates posted its largest advance in more than four years.
The MSCI Asia Pacific Index advanced 1.2 percent to 137.2 as of 7:28 p.m. in Tokyo, capping a ninth day of gains and the highest close since July 23. The gauge last week posted its biggest weekly advance since April on signs the global economy is recovering. Reports today showed factory output in China accelerated by 10.4 percent in August from a year earlier, while retail sales increased 13.4 percent, exceeding economist estimates.
“The market should be pretty positive that industrial production in China is picking up,” Evan Lucas, a Melbourne-based strategist at IG Markets, said in a telephone interview. “Positive indicators from China coupled with what’s going on in Japan really put Asia back on track, making the region a very good investment case.”
The Hang Seng China Enterprises Index (HSCEI) of mainland companies traded in Hong Kong increased 1.6 percent, extending gains from a June 25 low to 21 percent and entering what some investors consider a bull market. The benchmark Hang Seng Index climbed 1 percent, while China’s Shanghai Composite Index gained 1.2 percent.
Japan’s Topix index rose 1.5 percent. South Korea’s Kospi index climbed 1 percent. Australia’s S&P/ASX 200 Index gained 0.4 percent and New Zealand’s NZX 50 Index added 0.3 percent. Singapore’s Straits Times Index advanced 1.2 percent, while Taiwan’s Taiex index increased 0.2 percent. India’s S&P BSE Sensex Index jumped 3.8 percent as the rupee strengthened.
The Topix surged 38 percent this year, with Japanese equities performing the best among developed markets tracked by Bloomberg. Shares have jumped amid optimism Prime Minister Shinzo Abe and the Bank of Japan can lead the country out of deflation with stimulus and reforms.
Futures on the Standard & Poor’s 500 Index added 0.5 percent today. The equity gauge advanced 1 percent yesterday, the most in a week, amid almost $15 billion in takeovers involving U.S. companies.
The Federal Reserve has said any reduction in stimulus will be tied to a sustained recovery in U.S. employment. The central bank will decide to cut its $85 billion in monthly bond purchases this month, according to 65 percent of economists surveyed by Bloomberg from Aug. 9-13. The Federal Open Market Committee holds a two-day meeting on Sept. 17-18.
“Fed tapering remains a concern that could push market volatility higher,” said IG Markets’ Lucas.
Miners advanced amid optimism economic growth in China, the world’s biggest user of copper, is stabilizing. Jiangxi Copper climbed 3 percent to HK$16.32 in Hong Kong. Rio Tinto Group (RIO), the world’s second-largest mining company, gained 1.5 percent to A$62.88 in Sydney.
Komatsu jumped 6.4 percent to 2,428 yen in Tokyo, the most since September 2012, after the Nikkei newspaper reported its parts business will generate record operating profit this year. The company said on July 29 overall operating profit will increase 44 percent from a year earlier to 305 billion yen ($3.1 billion).
Shipping companies advanced after the Baltic Dry Index (BDIY), which measures the cost of shipping commodities from copper to corn, climbed 9.3 percent in London yesterday, the most since June 2009.
Mitsui O.S.K Lines (9104), the world’s largest merchant ship operator, increased 6 percent to 458 yen in Tokyo. China Shipping Development Co., which transports oil and coal, advanced 3.1 percent to HK$4.70 in Hong Kong.
Yakult Honsha Co. (2267) surged 7.2 percent to 4,625 yen in Tokyo after the company said it plans to sell Yakult-branded fermented milk drinks at a higher price following a product revamp.
Wockhardt Ltd. jumped 20 percent to 615.8 rupees in Mumbai, the most on the MSCI Asia Pacific Index. Avanir Pharmaceuticals Inc. settled a patent litigation case against the Indian maker of insulin and hepatitis vaccines, according to the company.
The MSCI Asia Pacific Index has climbed 6.1 percent so far this year. Shares on the Asia-Pacific gauge traded at 13.4 times estimated earnings, compared with 15.1 times for the S&P 500 Index and 14.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
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