Asian stocks rose a second week with the regional benchmark index posting its longest daily winning streak this year as positive U.S. data pointed to a recovery from harsh winter weather and China promised support to counteract a slowdown threatening the nation’s growth goal.
Samsung Electronics Co., which gets 29 percent of its sales from the Americas, added 3.4 percent for the week as data pointed to accelerating U.S. growth and Federal Reserve Chair Janet Yellen said the economy will need stimulus for “some time.” China Railway Group Ltd. (390), the country’s No. 2 builder of train lines, jumped 12 percent in Hong Kong after the government said it will boost spending on railways as part of stimulus plans. Hermes Microvision (3658) Inc. surged 17 percent in Taipei after Barclays Plc raised its target price.
The MSCI Asia Pacific Index added 1.9 percent this week to 139.27, bringing its two-week gain to 4.9 percent and capping an eight-day advance yesterday, its best winning streak this year. Earlier U.S. reports from hiring to factory output had shown weakness this year as freezing temperatures and snow kept shoppers indoors, grounded flights and made it harder to ship products. The Commerce Department this week said factory orders rose 1.6 percent in February, topping estimates for a 1.2 percent advance.
“It’s been a constructive week for equities,” George Boubouras, who helps oversee a $30 billion global equities portfolio as chief investment officer at Equity Trustees Ltd. in Melbourne, said by phone. “We still have this low global economic growth profile which implies policy remains accommodative for longer. That’s still so powerful as to drive earnings.”
Japan’s Topix index and the Nikkei 225 Stock Average both added 2.5 percent this week as the yen headed for its lowest since January. Stocks rose even after the Tankan index of sentiment among large manufacturers missed estimates and the national sales tax was raised to 8 percent from 5 percent, the first increased since 1997. Volume on the first section of the Tokyo Stock Exchange was a record 785 billion shares in the year ended March 31, Japan Exchange Group Inc. said this week.
Honda Motor Co. (7267), a carmaker that gets half its sales from North America, rose 3.4 percent to 3,674 yen in Tokyo. Renesas Electronics Corp. (6273) jumped 11 percent to 822 yen on a report Apple Inc. is seeking to buy a stake in a unit that designs chips for liquid-crystal displays used in smartphones.
The Asia-Pacific gauge traded at 12.67 times estimated earnings yesterday compared with 15.89 for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
The Institute for Supply Management’s index rose to 53.7 in March from 53.2 in February, showing U.S. manufacturing was expanding as a winter-depressed first quarter ended. The ISM’s services gauge advanced to 53.1 in March from a four-year low of 51.6 in February. Readings greater than 50 signal expansion.
ADP Research Institute said U.S. employment climbed a more-than-estimated 191,000 last month, following a 178,000 increase in February.
The signs of economic improvement come as the Fed’s Yellen on March 31 signaled the central bank’s unprecedented monetary stimulus would be needed for “some time” because of “considerable slack” in the labor market. She cited large numbers of partly unemployed workers, stagnant wages, lower labor-force participation and longer periods of joblessness.
South Korea’s Kospi index added 0.4 percent this week. Singapore’s Straits Times Index 1.3 percent as Noble Group Ltd. (NOBL), Asia’s biggest commodity trader by sales, jumped 5.8 percent after Chinese grain trader Cofco Corp. agreed to pay $1.5 billion upfront for just over half of Noble’s agricultural trading unit.
Taiwan’s Taiex index added 1.3 percent. Hermes Microvision, which makes inspection systems for semiconductors, jumped 17 percent to NT$1,395 after Barclays raised its price target to NT$2,000 from NT$1,240. The stock was the third-best performer this week on the Asian regional gauge.
Australia’s S&P/ASX 200 Index rose 1 percent as the central bank kept its benchmark interest rate at a record-low 2.5 percent. New Zealand’s NZX 50 Index fell 0.4 percent.
Hong Kong’s Hang Seng Index increased 2 percent as stimulus measures in China were outlined. The Hang Seng China Enterprises Index (HSCEI) of mainland stocks traded in the city added 1.1 percent.
The Shanghai Composite Index rose 0.8 percent as investors assessed mixed economic data in China. The Official Purchasing Managers’ Index of manufacturing rose to 50.3 in March from 50.2 the month before, while the final PMI reading by HSBC Holdings Plc and Markit Economics Ltd. was 48, the lowest since July. A separate report showed the a purchasing managers’ index for the services industry fell in March from February.
Railway, cement and property companies advanced after China released a package of measures including railway spending and tax relief to support a slowing economy that’s endangering Premier Li Keqiang’s target of 7.5 percent growth this year. The government will sell 150 billion yuan ($24 billion) of bonds this year to help build railways mainly in the less-developed central and western regions, the State Council said. Anhui Conch Cement Co. (914), China’s biggest producer of the building material, added 2.9 percent to HK$35.25 in Hong Kong.
India’s S&P BSE Sensex Index added 0.1 percent this week. Ranbaxy Laboratories Ltd., an Indian drugmaker, jumped 26 percent in Mumbai. The U.S. Food and Drug Administration recently said a study that found “quality issues” with generic drugs may not be valid, said Hitesh Mahida, an analyst at K.R. Choksey Shares and Securities Pvt. That may be seen “as a positive” for companies such as Ranbaxy, which have had “problems with the FDA,” he said.
To contact the editors responsible for this story: Sarah McDonald at firstname.lastname@example.org John McCluskey, Jim Powell