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Asian Stocks Cap Biggest 2-Week Gain Since January 2012 on China

Asian stocks rose this week, sending the benchmark index to its biggest two-week climb since January 2012, after Tokyo was chosen to host the 2020 Olympics and as data showed China’s economy is picking up. The rally reversed course yesterday ahead of a Federal Reserve meeting next week.

Taisei Corp. (1801), a Japanese building contractor expected to benefit from the Olympics, jumped 24 percent since Sept. 6 in Tokyo. BYD (1211) Co. gained 13 percent in Hong Kong on a report the automaker is developing an electric vehicle to challenge Tesla Motors Inc., and as China’s Hebei province said it’s seeking to increase sales of new energy vehicles. Wockhardt Ltd. (WPL), a maker of insulin and hepatitis vaccines, soared 28 percent in Mumbai after Avanir Pharmaceuticals Inc. settled patent litigation over a drug.

The MSCI Asia Pacific Index rose 2.5 percent to 137.09 this week, taking its climb since Aug. 30 to 5.3 percent as China reported better-than-estimated exports and industrial production data. Shares declined yesterday as investors weighed diplomatic negotiations seeking to avert a military strike on Syria and the Fed’s Sept. 17-18 meeting. Investors already anticipate a reduction of the U.S. central bank’s $85 billion in monthly bond purchases and don’t expect a sudden change in markets if it occurs, according to 57 percent of respondents in a Bloomberg Global Poll.

“The market’s focus shifted from major concern about the Fed’s tapering,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “There’s now a global recovery concept. There’s some reallocation right now with funds going out from the bond market, which is benefiting stocks.”

Index Multiples

Asia’s benchmark index was valued at 13.4 times estimated earnings on Sept. 12, compared with multiples of about 15.2 for the Standard & Poor’s 500 Index and 14.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Japan’s Topix index climbed 3.3 percent this week after Tokyo won the rights to host the 2020 Olympics. Taisei jumped 24 percent to 506 yen, while Hitachi Construction Machinery Co. gained 18 percent to 2,384 yen. General contractor Tokyu Construction Co. led the Topix index higher this week as the shares more than doubled. The Nikkei 225 Stock Average (NKY) climbed 3.9 percent.

Hong Kong’s Hang Seng Index (HSI) rose 1.3 percent this week, erasing this year’s losses, while the Hang Seng China Enterprises Index, also known as the H-share index, entered a bull market after rising more than 20 percent from its June low.

China’s Shanghai Composite Index jumped 4.5 percent as data showed the nation’s inflation remained subdued in August, while other economic reports beat expectations. Exports rose 7.2 percent from a year earlier in August, exceeding the 5.5 percent median estimate. Retail sales climbed 13.4 percent and the broadest measure of new credit almost doubled from July.

BYD Climbs

BYD, the Chinese automaker that counts Warren Buffett’s Berkshire Hathaway Inc. as an investor, soared 13 percent to HK$34.90 this week. The company is developing an electric vehicle that can accelerate to 62 miles per hour in 3.9 seconds, challenging the performance of Tesla’s vehicles, Sina.com reported, citing founder Wang Chuanfu. Tesla’s Model S sedan can reach 60 miles per hour in 5.4 seconds, according to the company’s website.

The northern Chinese province of Hebei aims to have more than 50,000 new energy vehicles by 2017 to curb air pollution and will offer subsidies to encourage people to buy them, according to a plan posted on the provincial government’s website this week.

South Korea’s Kospi Index (KOSPI) gained 2 percent this week as the central bank held its key interest rate steady. Taiwan’s Taiex Index rose 0.1 percent, while Singapore’s Straits Times Index climbed 2.4 percent

Australia’s Consumer Confidence

Australia’s S&P/ASX 200 Index gained 1.5 percent, reaching its highest level in more than five years after the Liberal-National coalition won last weekend’s election. Prime Minister-elect Tony Abbott will have to contend with rising unemployment, with the jobless rate climbing to a four-year high in August, a report from the statistics bureau showed.

Wockhardt surged 28 percent to 657.1 rupees in Mumbai, the second-biggest gain this week on the MSCI Asia Pacific Index, after Avanir Pharmaceuticals Inc. settled patent litigation involving a generic version of Nuedexta, a drug used to control abnormal emotional outbursts.

Sino Biopharmaceutical Ltd. (1177) was the week’s biggest decliner on the regional gauge, slumping 14 percent to HK$4.92 in Hong Kong, after media reports claiming bribery at a unit of the Chinese drugmaker. The company said it’s investigating the reports and that no senior management or board members of the group were involved.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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