Asian Stocks Had Biggest Weekly Gain Since April on Fed

Asian stocks rose, with the benchmark regional index gaining for a third week, after the Federal Reserve unexpectedly refrained from cutting stimulus and Japanese exports surged.

Li & Fung Ltd. (494), a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., climbed 3.3 percent in Hong Kong. Newcrest Mining Ltd., Australia’s biggest gold producer, jumped 9 percent after bullion rebounded for the first time in a month on the Fed decision. Panasonic Corp., an electronics maker that gets 48 percent of its sales abroad, gained 4.2 percent. Ranbaxy Laboratories Ltd. plunged after U.S. regulators restricted imports from one of the Indian drugmaker’s facilities, triggering a wave of analyst downgrades.

The MSCI Asia Pacific Index climbed 2.6 percent to 140.67 this week. The Standard & Poor’s 500 Index touched a record high after the Fed said it needs more evidence of sustainable recovery in the U.S. economy before slowing the pace of $85 billion in monthly asset purchases.

“The market rallied following the surprise Fed move,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking, which oversees about $207 billion. “Maybe the Fed would rather be late in tapering stimulus than be too early and set whole economy back. Asian stocks will probably continue higher since we continue to see quite good data even from China. North Asian exporters are benefiting from improvements in developed economies.”

Japanese Exports

Japan’s Topix index rose 5.3 percent this week to a two-month high, with reports showing the nation’s exports jumped the most since August 2010 as the trade deficit narrowed. Australia’s S&P/ASX 200 Index (AS51) gained 1.1 percent, touching a five-year high. New Zealand’s NZX 50 Index climbed 1.7 percent, reaching a record on Sept. 19. Singapore’s Straits Times Index increased 3.8 percent.

Holidays cut trading this week to four days in Hong Kong, three days in China and Taiwan, and two in South Korea. Taiwan’s Taiex index gained 0.8 percent, while South Korea’s Kospi index added 0.6 percent. Hong Kong’s Hang Seng Index (HSI) advanced 2.6 percent. The Shanghai Composite Index lost 2 percent.

Emerging markets across the region surged the most this week as currencies rebounded after the Fed decision. Indonesia’s Jakarta Composite Index jumped 4.8 percent and Thailand’s SET Index rose 6.1 percent. India’s Sensex Index gained 2.7 percent, paring gains after the nation’s central bank unexpectedly raised rates to curb inflation.

The Asia-Pacific gauge has rallied 8.8 percent so far this year amid signs China’s economic growth is stabilizing. It’s trading at 13.7 times estimated earnings, compared with multiples of 15.5 for the S&P 500 and 14.4 times for the Stoxx Europe 600 Index, data compiled by Bloomberg show.

China Output

Chinese manufacturing activity continued to expand this month, according to estimates compiled by Bloomberg. A preliminary survey of September manufacturing activity from HSBC Holdings Plc and Markit Economics is scheduled to be released on Sept. 23. A report on industrial profits for August is due out on Sept. 27.

Japan’s Topix (TPX) climbed 42 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.

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.

Fed Tapering

Tapering could begin later this year should economic data continue to strengthen and the first interest-rate increase may not come until the jobless rate is considerably lower than 6.5 percent, Fed Chairman Ben S. Bernanke said on Sept. 18.

Exporters advanced. Li & Fung, which gets 63 percent of sales of from the U.S., climbed 3.3 percent to HK$11.96 in Hong Kong. Panasonic gained 4.2 percent to 960 yen. James Hardie Industries SE (JHX), a building materials supplier that counts the U.S. as its biggest market, jumped 5.7 percent to A$10.62 in Sydney.

Wing Hang Bank Ltd. jumped 43 percent to HK$118.90 to lead family lenders higher in Hong Kong. Owners including members of Chairman Patrick Fung’s family and related trusts are holding preliminary talks for a sale that would trigger a mandatory buyout offer, the bank said Sept. 16.

Takeover Talks

Wing Hang joins Chong Hing Bank Ltd. in acquisition talks as the city’s role as an international yuan center attracts mainland financial institutions seeking overseas expansion. Chong Hing, Hong Kong’s smallest family-run lender, surged 21 percent to a record HK$34.80.

Billabong International Ltd., an Australian surfwear maker that had said its namesake brand is worthless, lost 2.3 percent to 42 Australian cents in Sydney after accepting a refinancing plan from Oaktree Capital Management LP and Centerbridge Partners LP, walking away from a rival deal.

Ranbaxy, India’s largest drugmaker, slumped 2.9 percent to 457.2 rupees in Mumbai. Recommendations on the stock were lowered by brokerages including Jefferies LLC, HSBC Holdings Plc, and Edelweiss Securities Ltd. after the U.S. Food & Drug Administration issued an import alert against a Ranbaxy facility in Mohali, Punjab state. Parent company Daiichi Sankyo Co. lost 3.1 percent to 1,843 yen in Tokyo.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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