Asian shares rose, with the Nikkei 225 Stock Average closing above 20,000 for the first time since April 2000. China’s benchmark climbed to a seven-year high on bets the government will counter slowing growth with stimulus.
Mitsubishi UFJ Financial Group Inc. advanced 3 percent in Tokyo, with the lender providing the biggest boost to the regional equity index. Huaneng Power International Inc. surged 15 percent to a record in Hong Kong before data tomorrow that’s expected to show a continued slump in factory activity. Energy shares were the only industry group to decline on the regional gauge, with Santos Ltd. losing 1.8 percent in Sydney after oil prices fell ahead of a report forecast to show U.S. stockpiles expanded from a record.
The MSCI Asia Pacific Index added 0.7 percent to 155.06 as of 11:53 a.m. in London. Global equities are close to touching a record value of more than $71 trillion as companies report earnings, while central banks from Europe and Asia continue stimulus programs.
“The mid-term outlook for Japanese equities is attractive,” said Alex Treves, Tokyo-based head of equities for Japan at Fidelity Worldwide Investment, which has about $275 billion in assets under management. “There remain many marginal buyers to generate further inflows into the Japanese equity market. Any near-term corrections should provide investors with good opportunities to increase exposure.”
The Nikkei 225 added 1.1 percent to 20,133.90 in Tokyo. After closing above 20,000 on March 27, 2000, the gauge fell below that mark on April 17 of that year and failed to breach it again until today. The Topix added 0.8 percent.
The Shanghai Composite rose 2.4 percent to 4,398.49, the highest since March 2008. The People’s Daily said in an online commentary that the bull market is just getting started at the 4,000 level.
The People’s Bank of China cut lenders’ reserve requirements this week by the most since the global financial crisis, outweighing the failure of Baoding Tianwei Group Co. to pay interest on a bond yesterday. The first-ever default of a state-owned company on onshore debt underscores the government’s pledge to open the economy to market forces.
The Hang Seng China Enterprises Index of mainland firms trading in Hong Kong advanced 1 percent, while the benchmark Hang Seng Index added 0.3 percent. India’s S&P BSE Sensex Index climbed 0.8 percent. Australia’s S&P/ASX 200 Index fell 0.6 percent, and New Zealand’s NZX 50 Index slipped 0.4 percent. South Korea’s Kospi index was little changed.
E-mini futures on the Standard & Poor’s 500 Index lost 0.4 percent. Yahoo! Inc. rose in post-market trading Tuesday after reporting results. More than 140 S&P 500 companies post earnings this week. While analysts are predicting a slump through September, they have moderated how steep that drop in earnings will be.
The S&P 500 slid 0.3 percent in New York on Tuesday as investors weighed corporate profits. Data due this week on U.S. housing and jobs will be watched by investors for hints as to when the Federal Reserve will raise interest rates.
“They’re getting through the earnings season in the U.S. unscathed,” said Evan Lucas, Melbourne-based market strategist at IG Ltd. “More and more the expectation is that the Fed won’t do anything soon. The momentum in equities is still there.”