Asian stocks rose, with the benchmark regional index gaining the most in a year, after the Federal Reserve unexpectedly refrained from cutting U.S. economic stimulus.
The MSCI Asia Pacific Index climbed 2.2 percent to 141.73 as of 6:59 p.m. in Hong Kong, for the highest close since May 22 and biggest daily advance since Sept. 14, 2012. All 10 industry groups on the gauge increased. Markets in mainland China, South Korea, Taiwan and Sri Lanka are closed for holidays. Standard & Poor’s 500 Index futures added 0.4 percent after the equities gauge climbed to a record in New York yesterday.
The Federal Open Market Committee said it wants more evidence that improvement in the U.S. economy will be sustained before slowing the pace of its $85 billion in monthly asset purchases. Analysts had predicted a $5 billion reduction, according to estimates compiled by Bloomberg. Tapering could begin later this year should the data confirm the Fed’s “basic outlook,” Chairman Ben S. Bernanke said.
“It’s taper off, risk on,” Keith Poore, head of investment strategy at AMP Capital Investors Ltd. in Wellington, which manages about $130 billion, said by telephone. “Ultimately it will be supportive for markets. You want to hold on to your risk positions if you have them at the moment. We take it as a positive, as it’s definitely dovish.”
Japan’s Topix (TPX) index rose 1.9 percent to its highest close in eight weeks, with a report showing the nation’s exports jumped the most since 2010 in August from a year earlier. Australia’s S&P/ASX 200 Index (AS51) gained 1.1 percent to a five-year high. New Zealand’s NZX 50 Index climbed 1.1 percent to a record. Hong Kong’s Hang Seng Index added 1.7 percent, and Singapore’s Straits Times Index increased 1.8 percent.
Raw-material producers posted the largest gains among the 10 industry groups on the Asia-Pacific benchmark index. BHP Billiton Ltd., the world’s largest mining company, rose 1.6 percent to A$36.68, while Rio Tinto Group, the second-biggest, advanced 3.1 percent to A$63.63.
Gold producers advanced after prices for the precious metal gained the most in 15 months yesterday. Newcrest Mining Ltd. (NCM) jumped 7.9 percent to A$12.93 in Sydney. Sumitomo Metal Mining Co. surged 6.8 percent to 1,441 yen in Tokyo. Zhaojin Mining Industry Co., China’s No. 2 gold producer, jumped 12 percent to HK$7.40 in Hong Kong.
The Asia-Pacific gauge has rallied 9.5 percent so far this year amid signs China’s economic growth is stabilizing. It is trading at 13.8 times estimated earnings, compared with multiples of 15.6 for the S&P 500 and 14.4 times for the Stoxx Europe 600 Index, data compiled by Bloomberg show.
Japan’s Topix climbed 41 percent this year, the most among developed markets, amid optimism Prime Minister Shinzo Abe and the Bank of Japan can lead the country out of deflation through unprecedented monetary easing. About 13 trillion yen ($131 billion) was added to the market capitalization of the Topix last week after the city’s winning bid for the 2020 Olympic Games was announced, data compiled by Bloomberg show.
North Asian stocks will rise faster this year than the rest of the region as a strengthening global economy boosts exports, according to Haren Shah, Singapore-based chief strategist for Asia-Pacific at Citigroup Inc.’s wealth management division, which oversees $210 billion. The firm is recommending investors buy technology and industrial companies from China, South Korea and Taiwan.
Billabong International Ltd., an Australian surfwear maker that had said its namesake brand is worthless, accepted a refinancing plan from Oaktree Capital Management LP and Centerbridge Partners LP, walking away from a rival deal. The shares, which fell 46 percent this year through yesterday, gained 5.6 percent to 47.5 Australian cents today.
Emerging markets across the region surged the most after yesterday’s Fed decision. Indonesia’s Jakarta Composite Index jumped 4.7 percent and Thailand’s SET Index rose 3.5 percent. India’s Sensex Index gained 3.4 percent.
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