Asian Stocks Climb to Highest Since 2008 as Topix Rallies

Asia’s benchmark stock index rose to their highest level since June 2008 fueled by a rally in Japanese equities. Most stocks in the region outside Tokyo fell after the World Bank cut its global economic growth forecast.

Japan Drilling Co. climbed 3.1 percent as energy explorers led gains on the Topix index. Daiichi Sankyo (4568) Co. gained 1.7 percent after Mizuho Securities Co. raised its rating on the drugmaker. Beijing Enterprises Holdings Ltd. (392), a state-owned brewer and gas supplier, lost 4 percent in Hong Kong after saying its controlling shareholder will sell exchangeable bonds.

The MSCI Asia Pacific Index (MXAP) rose 0.4 percent to 144.49 at 6:59 p.m. in Hong Kong. The measure has rebounded 11 percent from this year’s low in February amid signs the Chinese economy is stabilizing and the U.S. recovery is intact. The MSCI Asia Pacific Index Excluding Japan Index lost 0.1 percent to 494.31 after closing yesterday at its highest level since May 2011.

“There isn’t any news that can drive the market much higher,” Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “The global economic outlook is still a worry. While the U.S. economy is recovering, emerging economies are continuing to see a slowdown.”

The World Bank cut its global growth forecast amid a weaker outlook for the U.S., Russia and China. The Washington-based lender predicts the world economy will expand 2.8 percent this year, compared with a January projection of 3.2 percent. The U.S. prediction was reduced to 2.1 percent from 2.8 percent, while estimates for Brazil, Russia, India and China were also lowered. The 2015 forecast for world economic growth was unchanged at 3.4 percent.

‘Relatively Cheap’

Japan’s Topix index rose 0.8 percent after sliding 0.5 percent yesterday. While the Topix has climbed 7.7 percent from a recent low on May 21, it remains the worst performer this year among 24 developed markets tracked by Bloomberg.

“Japanese stocks are still relatively cheap and playing catch-up with other developed markets,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank. “Conditions are not bad. The market may get corrected once in a while like yesterday, but it will be a healthy correction.”

A Topix group tracking energy explorers advanced 2.9 percent to the highest level since April 2011. Japan Drilling advanced 3.1 percent to 4,815 yen, while Inpex Corp. added 3.1 percent to 1,554 yen.

Daiichi Sankyo rose 1.7 percent to 1,765 yen after Mizuho Securities raised the company’s rating to buy from neutral, saying new products will drive earnings growth.

Regional Gauges

South Korea’s Kospi Index, Taiwan’s Taiex and China’s Shanghai Composite Index all added 0.1 percent. Australia’s S&P/ASX 200 Index and Hong Kong’s Hang Seng Index both declined 0.3 percent. New Zealand’s NZX 50 Index (NZSE50FG) closed unchanged. Singapore’s Straits Times Index slipped 0.1 percent.

MSCI Inc. won’t include China’s locally-traded shares in its emerging-markets index, while South Korea and Taiwan were removed from consideration for an upgrade to developed market status, the index provider said in a statement. MSCI, which based its decision on limitations to investing in China’s so-called A-shares, may consider an inclusion in 2015, it said.

Casinos Rebound

Gaming operators rebounded after falling yesterday on a report Macau’s government plans to further restrict the use of China UnionPay Co.’s debit cards at casinos. Galaxy Entertainment Group Ltd. rose 3 percent to HK$57.65 after its chairman Lui Che Woo said the curbs will have little impact on the company. Sands China Ltd. gained 3.6 percent to HK$53.70 after Credit Suisse Group AG said the sell-off was excessive.

LG Display Co. rose 1.4 percent to 29,500 won in Seoul as the supplier of touch screens to Apple Inc. is said to be in talks to supply big-screen television panels to Panasonic Corp.

Among shares that fell, Beijing Enterprises slipped 4 percent to HK$72.45 in Hong Kong after saying its controlling shareholder plans to raise HK$4.3 billion ($555 million) selling exchangeable bonds.

L’Occitane International SA dropped 2.8 percent to HK$17.30 in Hong Kong after the cosmetics maker posted full-year profit that missed analyst estimates.

Takata Corp., whose airbags led to the recall of more than 3 million vehicles last year, retreated 4.1 percent to to 2,151 yen in Tokyo after telling customers including Honda Motor Co. that defective parts may need to be fixed again.

Downer EDI Ltd. tumbled 11 percent to A$4.70 in Sydney as BHP Billiton Ltd. canceled a contract with the engineering-services company.

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

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

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