Asian stocks headed for the biggest weekly gain since April, led by Chinese shares amid speculation banks will support the market and as the increased likelihood of an end to Greece’s debt crisis bolstered global equities.
The Shanghai Composite Index advanced 3.5 percent. China Securities Finance Corp., a state-backed agency that provides margin finance and liquidity to the stock market, has as much as 3 trillion yuan ($483 billion) on tap to support shares, people familiar with matter said on Friday. Taiwan Semiconductor Manufacturing Co. climbed 2.6 percent in Taipei after profit topped estimates, leading technology firms to the biggest advance on the regional gauge.
The MSCI Asia Pacific Index gained 0.3 percent to 144.73 as of 4:01 p.m. in Hong Kong, heading for a 2.6 percent advance this week. CSF funding would add to already announced unprecedented measures from Chinese authorities to stem a rout that wiped more than $3 trillion from mainland market equities.
“Don’t stand in front of the Beijing freight train,” said Gavin Parry, Hong Kong-based managing director of Parry International Trading Ltd. “As good measure into the last hour of Shanghai trading, there was news that the China Securities Finance Corp had 2.5-3 trillion yuan available to support stocks. There drops another bear carcass on the side of the Shanghai A road.”
Hong Kong’s Hang Seng Index climbed 1 percent and the Hang Seng China Enterprises Index rose 0.9 percent.
The money was available from the central bank’s relending facility; credit lines with commercial banks; borrowing by CSF in the interbank market; and bonds and short-term notes sold by CSF, the people said, asking not to be named because the information wasn’t public.
The CSF funding is to offer liquidity support to brokers and to purchase stocks and mutual funds, the people said.
Banks including Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Bank of China Ltd. and China Merchants Bank Co. had each already provided credit of at least 100 billion yuan to CSF as of July 13, bank officials familiar with the matter said, asking not to be named because the information wasn’t public.
The Standard & Poor’s 500 Index added 0.8 percent on Thursday, while the Stoxx Europe 600 Index increased 1.4 percent for a seventh day of gains after Greece’s parliament approved bailout measures and the European Central Bank boosted emergency aid.
ECB President Mario Draghi sought to draw a line under the Greek crisis Thursday, confirming the nation’s place in the euro, as the central bank decided to raise funding to its lenders by 900 million euros ($979 million). He also said that Europe’s economic pickup is proceeding and increased uncertainty in financial markets isn’t hindering a broadening of that recovery.
“We’re not saying the situation in Greece is totally resolved, but at least there is some calm now,” Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management Ltd., which oversee about $41 billion, told Bloomberg TV. “The focus is still on China and on the U.S. Fed rate hikes.”
South Korea’s Kospi index slid 0.5 percent. Samsung Heavy Industries Co. fell 12 percent, leading a drop in shares of South Korean shipbuilders on a report the company may post an operating loss as large as 1 trillion won ($873 million).
Samsung Group prevailed in one of the most contested proxy fights South Korea has seen, defeating billionaire investor activist Paul Elliott Singer and underscoring the resilience of the nation’s corporate dynasties.
Shares of the two Samsung companies involved plunged on Friday after Samsung C&T Corp. investors accepted a buyout offer from the group’s de facto holding company, Cheil Industries Inc. Singer’s Elliott Associates LP waged a six-week public campaign opposing the deal on grounds that the offer was too low for C&T investors.
Japan’s Topix index rose 0.1 percent. Australia’s S&P/ASX 200 Index and Singapore’s Straits Times Index were little changed. New Zealand’s NZX 50 Index gained 0.5 percent and India’s S&P BSE Sensex advanced 0.1 percent.
E-minis on the S&P 500 were little changed. American investors turned to the raft of earnings reports for clues on the health of the world’s largest economy. Netflix Inc. climbed to a record after reporting a jump in subscribers, while Citigroup Inc. and EBay Inc. advanced after disclosing results.