Asian stocks rose from a three-month low, led by the biggest surge in Chinese shares since 2009, amid speculation the government will take steps to prevent further losses and as investors watched developments in Greece.
Haitian International Holdings Ltd. surged as much as 14 percent in Hong Kong before the maker of machine parts plunged in the final minutes of trading to close 6.9 percent higher. Kathmandu Holdings Ltd. soared 26 percent in Sydney, the steepest rise on Australia’s S&P/ASX 200 Index, after New Zealand retailer Briscoe Group Ltd. said it will make a takeover bid for the adventure clothing chain.
The MSCI Asia Pacific Index rose 0.9 percent to 146.36 as of 4:07 p.m. in Hong Kong after closing Monday at the lowest since March 17. All 10 industry groups advanced. The Shanghai Composite Index gained 5.5 percent, with a rebound in afternoon trading, as the Economic Observer reported the government is considering steps including a reduction in the stamp tax, while the finance ministry said it will allow the pension fund to invest in shares.
“I would recommend buying into weakness,” Enzio Von Pfeil, a strategist at Private Capital Investment, told Bloomberg TV in Hong Kong. “The government is stepping in. You’ll find the smart money moving in to buy the cheap stuff.”
The MSCI Asia Pacific Index is on course to fall 3.4 percent this month and end the quarter mostly unchanged.
Gauges in Hong Kong and China rose most on Tuesday. Hong Kong’s Hang Seng Index advanced 1.1 percent and the Hang Seng China Enterprises Index added 2.3 percent.
Speculation is growing that policy makers are preparing measures to prop up the stock market after the Shanghai Composite plunged more than 20 percent from a peak amid concern surging valuations and record high levels of margin debt were unsustainable.
Most markets rebounded from Monday declines. India’s S&P BSE Sensex Index added 0.1 percent and Singapore’s Straits Times Index gained 1.2 percent. Australia’s S&P/ASX 200 Index rose 0.7 percent on the final day of the financial year. Japan’s Topix index advanced 0.3 percent, extending its gain for the second quarter to 5.7 percent. South Korea’s Kospi index added 0.7 percent and New Zealand’s NZX 50 Index rose 0.4 percent.
The Standard & Poor’s 500 Index sank 2.1 percent on Monday, while the Stoxx Europe 600 Index dropped 2.7 percent. E-mini futures on the S&P 500 climbed 0.3 percent today.
Greece plunged into financial turmoil as Prime Minister Alexis Tsipras decided to put creditors’ demands to a referendum. After the nation imposed capital controls and shut its banks, the focus Tuesday shifts to whether it will default, with $1.7 billion due to the International Monetary Fund. As 12,000 people gathered in Athens’ Syntagma Square with banners that read “our lives do not belong to the creditors,” Tsipras struck a defiant tone, saying European leaders don’t have the nerve to kick Greece out of the euro.
Markets will be looking to the European Central Bank for measures to contain the crisis, Mohamed El-Erian, chief economic adviser at Allianz SE and a Bloomberg View columnist, said in an interview from New York.
“All eyes this week will be on the ECB, which has the potential to announce a front-loading of its QE program,” said Matthew Sherwood, Sydney-based head of investment strategy at Perpetual Ltd. “That should help stabilize things.”