Asian Stocks Cap Longest Streak of Weekly Gains Since September

Asian stocks rose this week, with the regional gauge capping its longest streak of weekly gains since September, as U.S. data signaled resilience in the world’s biggest economy and concern about the Ukraine crisis eased.

Honda Motor Co. (7267), a carmaker that gets almost half its sales in North America, climbed 4.5 percent in Tokyo. Sekisui House (1928) Ltd. advanced 4.9 percent after the Japanese developer’s profit forecast beat analysts’ estimates. Sun Art Retail Group Ltd. (6808) jumped 11 percent in Hong Kong as Barclays Plc and UBS AG raised their ratings on China’s largest hypermarket operator after it posted higher profit.

The MSCI Asia Pacific Index increased 0.9 percent to 139.12 this week, extending gains for a fourth straight week. Shares advanced after reports showed U.S. manufacturing expanded at a faster pace than projected in February while fewer Americans than projected filed unemployment claims last week, and as concern eased that Russia’s incursion into Ukraine will spark a broader conflict.

“A period of positive market outlook is not that strange when the global economy is in the best shape it has been over the last year,” said Hans Stoter, chief investment officer at ING Investment Management, which oversees about $241 billion. “I don’t think Ukraine has such a big impact.”

Japan’s Topix index climbed 2.1 percent this week as the yen weakened and an advisory committee said the Government Pension Investment Fund, the world’s largest, doesn’t need a domestic-bond focus. The Japanese currency slid 1.4 percent against the dollar this week, the biggest drop since July.

Right Direction

“I think pension funds are moving in the right direction because they have been too risk averse,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 11 trillion yen ($107 billion). “It’s not a bad thing they are going to take risk, but we need to be ready for higher volatility in assets.”

China’s Shanghai Composite Index added 0.1 percent, its first weekly gain in three weeks, as investors assessed the outcome of the National People’s Congress.

Premier Li Keqiang kept the annual growth target unchanged at 7.5 percent for 2014, stoking speculation the government will allow the country’s $21 trillion debt mountain to inflate. President Xi Jinping, who took office a year ago, pledged the broadest expansion of economic freedoms since at least the 1990s in November. Policy makers may unveil more details before the legislative meeting ends on March 13.

Chaori Default

Shanghai Chaori Solar Energy Science & Technology Co. Science & Technology Co. failed to make an interest payment on a bond yesterday. The maker of energy cells to convert sunlight failed to make a payment of 89.8 million yuan ($14.7 million), signaling the government will back off its practice of bailing out companies with bad debt.

“This will have limited spillover effects in other markets,” ING’s Stoter said. “If you have an industry with pretty high overcapacity and if you have companies that have too much debt, at some point they should be allowed to default.”

India’s BSE Sensex Index jumped 3.8 percent, its best weekly gain since April 2013, after data showed overseas funds extended purchases of local shares ahead of general elections that start next month.

Taiwan’s Taiex index gained 0.9 percent. Australia’s S&P/ASX 200 Index (AS51) increased 1.1 percent to a 5 1/2-year high. New Zealand’s NZX 50 Index advanced 2.7 percent to a record. Hong Kong’s Hang Seng Index slipped 0.8 percent, while the Hang Seng China Enterprises Index of mainland companies traded in the city fell 1.8 percent. South Korea’s Kospi index declined 0.3 percent.

U.S. Data

U.S. jobless claims declined by 26,000 to 323,000 in the week ended March 1, the least since the end of November and fewer than any economist forecast in a Bloomberg survey, a Labor Department report showed March 6 in Washington.

Employers added more workers than projected in February. The 175,000 gain in employment followed a 129,000 increase the prior month that was bigger than initially estimated, Labor Department figures showed yesterday in Washington. The jobless rate rose to 6.7 percent from 6.6 percent as the number of people joining the workforce swamped the quantity of jobs available.

The Institute for Supply Management’s manufacturing index rose to 53.2 from 51.3 in January, the Tempe, Arizona-based group reported March 3. That was more than economists had projected.

Japanese exporters climbed as the yen weakened. Honda rose 4.5 percent to 163 yen. Sony Corp. (6758), the maker of Bravia televisions and PlayStation game consoles, jumped 3.6 percent to 1,844 yen.

Sekisui House rose 4.9 percent to 1,336 yen. The homebuilder forecast full-year profit of 89 billion yen, beating analyst estimates.

China Vanke

China Vanke Co.’s Hong Kong-dollar B shares surged 13 percent to HK$12.95 in Shenzhen after Hong Kong’s regulator approved the company’s plan to shift foreign-currency shares to the city. Full-year profit rose, the developer also said this week.

Sun Art added 11 percent to HK$9.79 in Hong Kong. The retailer posted a 15 percent increase in full-year net income to 2.78 billion yuan and said it would expand in smaller Chinese cities. Barclays raised its rating on the stock to overweight from equal-weight, while UBS changed its recommendation to neutral from sell.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; David Yong in Singapore at dyong@bloomberg.net

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

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