Asian Stocks Rise This Week on Fed Stimulus, China Policy

Asian stocks rose this week, with the benchmark index gaining for the first time in a month, on optimism policy makers in the U.S. and China will bolster growth in the world’s two biggest economies. Japanese shares jumped as the yen weakened.

Shandong Weigao Group Medical Polymer Co., a Chinese medical products maker, soared 34 percent in Hong Kong this week after reporting higher sales, leading gains on the MSCI Asia Pacific Index. Nissan Motor Co. (7201), which gets about 80 percent of revenue outside Japan, rose 4.6 percent as the yen declined to a two-month low. James Hardie (JHX) Industries Plc, a building-materials supplier that makes more than half its sales in the U.S., jumped 13 percent in Sydney after reporting better-than-expected operating profit.

The MSCI Asia Pacific Index rose 1.9 percent to 141.57 this week, the biggest weekly advance since the five days ended Sept. 20. China may release details of its economic policy plans as early as next week, according to Morgan Stanley. Janet Yellen, the nominee for chairman of the Fed, signaled during her Senate confirmation hearing this week that she’ll maintain record monetary stimulus until the economy is stronger.

“The statement made by Yellen is definitely favorable for equity markets,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd., which manages about $51 billion. “Fourth quarter is a very favorable period for equity markets around the world. It looks like global investors are back in Japan again.”

Japan, China

Japan’s Nikkei 225 Stock Average (NKY) surged 7.7 percent this week, climbing above 15,000 for the first time since May and posting the steepest weekly rally in almost four years. China’s Shanghai Composite advanced 1.4 percent.

Asia’s regional equities gauge slumped on Nov. 13 amid disappointment in the lack of details released at the conclusion of China’s four-day leadership meeting. Shares then reversed course, with gains accelerating yesterday as the Communist Party’s People’s Daily newspaper reported that a 20,000 word document approved at the plenum lays out 15 areas of reform and 60 “concrete tasks.”

Policy changes may be announced over the next seven to 10 days, Jonathan Garner, the Hong Kong-based chief Asia and emerging-market strategist at Morgan Stanley, said on Nov. 14.

President Xi Jinping said corruption remains a problem and urged more courage and stronger measures to push forward reforms, according to a transcript of his speech at the plenum published yesterday by the official Xinhua News Agency.

MSCI’s Asia-Pacific gauge advanced 9.4 percent this year amid optimism the Fed will continue its bond buying into 2014 and that Japan policy makers can lead the country out of deflation. This week’s advance pushed its earnings multiple to about 13.8 times estimated profit, according to data compiled by Bloomberg.

Global Advance

Global shares climbed this week after Yellen, nominated to succeed Fed Chairman Ben S. Bernanke, testified to the Senate that removing monetary stimulus too soon would threaten a fragile economic recovery. Jobless claims for the week ended Nov. 9 fell less than estimated, adding to the case for delaying reduction of asset purchases.

The yen weakened past 100 to the dollar for the first time since September, boosting the outlook for the nation’s exporters. Nissan rose 4.6 percent to 924 yen this week. Pioneer Corp. surged 20 percent, leading gains on the Nikkei 225, after the maker of audio gear posted an unexpected first-half operating profit.

Taiwan’s Taiex index slid 0.6 percent, while Singapore’s Straits Times Index rose 0.8 percent. Australia’s S&P/ASX 200 Index (AS51) was little changed.

Hong Kong’s Hang Seng Index (HSI) advanced 1.3 percent this week, while the Hang Seng China Enterprises Index, a gauge of mainland stocks also known as the H-share index, jumped 3 percent. Shandong Weigao Group leaped 34 percent to HK$9.38 after posting third-quarter sales that beat analysts’ estimates. China’s Shanghai Composite Index climbed 1.4 percent.

James Hardie jumped 13 percent to A$12.17 in Sydney, a record high, after its second-quarter net operating profit excluding some items beat analyst estimates.

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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