Asian Stocks Rise on U.S. Stimulus, China Policy Optimism

Asian stocks headed for the first weekly gain in a month after Federal Reserve chairman nominee Janet Yellen said she would continue U.S. stimulus and amid optimism China will soon release details of economic reforms.

Japan’s Nikkei 225 Stock Average (NKY) surged beyond 15,000 for the first time since May, rising 1.9 percent and capping its biggest weekly gain since December 2009. China’s CSI 300 Index jumped 2 percent, its largest increase in two months.

The MSCI Asia Pacific Index added 1.3 percent to 141.47 as of 5:22 p.m. in Hong Kong, extending this week’s advance to 1.8 percent. The gauge is set to snap three weeks of declines, the longest such streak since June. All 10 industry groups on the measure rose.

“The pendulum has swung to the positive side after the disappointment with the plenum and that’s coming with all the good news about the Fed stimulus outlook,” Adrian Zuercher, a global strategist at Credit Suisse (Hong Kong) Ltd., part of the asset-management unit of Credit Suisse Group AG that oversees the equivalent of $404 billion. “Any policy changes are going to be in the right direction and improve market stability.”

Shares in China and Hong Kong fell on Nov. 13 on investors disappointment after the Communist Party plenum. Expectations that the government would release details of discussions soon at the end of the meeting were “misplaced” as reforms will be announced over the next seven to 10 days, Jonathan Garner, Hong Kong-based chief Asia and emerging-market strategist at Morgan Stanley, said in an interview from Singapore yesterday.

Regional Gauges

Japan’s broader Topix (TPX) index gained 1.7 percent. South Korea’s Kospi index rose 1.9 percent. Australia’s S&P/ASX 200 Index advanced 0.9 percent, while New Zealand’s NZX 50 Index fell 0.3 percent. Singapore’s Straits Times Index increased 0.3 percent.

The Asia-Pacific gauge traded at 13.61 times estimated earnings as of yesterday, compared with 16.2 for the Standard & Poor’s 500 Index and 15 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Stimulus Outlook

Futures on the S&P 500 added 0.1 percent today. The measure gained 0.5 percent to a record yesterday. Yellen, nominated to succeed Fed Chairman Ben S. Bernanke, told the Senate that removing monetary stimulus too soon would threaten a fragile economic recovery. Asked yesterday about stock prices, Yellen testified she doesn’t see “bubble-like conditions.”

“This wasn’t just music to the ears of stimulus-hungry investors, it was like listening to Beethoven’s Ninth Symphony,” said Matthew Sherwood, head of investment markets research in Sydney at Perpetual Investments, which manages about $25 billion.

The S&P 500 has rallied more than 25 percent this year, putting it on pace for the best annual gain in a decade. The gauge has rebounded 165 percent from a 12-year low in March 2009, adding more than $10 trillion in market value.

Chinese Stocks

Hong Kong’s Hang Seng Index rose 1.7 percent and the Hang Seng China Enterprises Index of mainland stocks traded in the city gained 3 percent. China’s Shanghai Composite Index advanced 1.7 percent.

China’s Communist Party’s Central Committee passed a 20,000-word “decision about major issues related to reform” that addresses 15 areas and 60 “concrete tasks,” said Yang Weimin, a deputy head at the Office of the Central Leading Group on Financial & Economic Affairs, according to a People’s Daily report today.

Japanese exporters climbed as the yen fell below 100 per dollar, boosting the earnings outlook for companies generating sales overseas. Toyota Motor Co. (7201) added 1 percent to 6,370 yen. Honda Motor Co. gained 0.9 percent to 4,090 yen, extending its weekly advance to 5.7 percent.

Dai-Ichi Life Insurance Co. surged 6.6 percent to 1,542 yen in Tokyo after raising its full-year net income forecast by 54 percent to 57 billion yen ($569 million).

Luk Fook

Luk Fook Holdings (International) Ltd. soared 8.9 percent to HK$29.95, heading for the highest closing level in Hong Kong since January, after the jeweler said increased sales of gold products will boost profit.

Nintendo Co. rallied 5.2 percent to 13,070 yen in Tokyo after the creator of the Mario and Zelda video-game franchises bought a stake in Dwango Co., a provider of mobile content. Dwango surged 21 percent to 2,264 yen

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net; David Yong in Singapore at dyong@bloomberg.net

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

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