Asian Stocks Advance on China Optimism as Japanese Shares Soar

  • Nikkei 225 rebounds from slump for biggest gain since 2008
  • Chinese markets rise for second day on stimulus outlook

Asian shares rose, with Japan’s Nikkei 225 Stock Average surging by most since the aftermath of the 2008 Lehman Brothers Holdings Inc. bankruptcy, amid optimism that China will succeed in stabilizing mainland markets.

Fashion retailer Fast Retailing Co. jumped 10 percent, providing the biggest boost to the Nikkei 225. Murata Manufacturing Co. climbed 9.1 percent in Tokyo, leading Apple Inc. suppliers higher ahead of the unveiling of new iPhone and iPad models. Cheung Kong Infrastructure Holdings Ltd. rose 4.2 percent to a record in Hong Kong after offering to buy sister company Power Assets Holdings Ltd. for $11.6 billion in stock as controlling shareholder Li Ka-shing seeks to combine his utility businesses for further expansion.

The MSCI Asia Pacific Index climbed 4.3 percent to 129.55 as of 4:06 p.m. in Hong Kong, heading for its biggest advance since April 2009. The Nikkei 225 jumped 7.7 percent and reversed losses on Tuesday that wiped out the gauge’s 2015 advance. U.S. investors returned from a long weekend to the first gains in mainland Chinese stocks for five trading days, with shares soaring in late afternoon trade in a pattern that’s associated with state buying. The Federal Reserve remains in focus, with traders counting down to next week’s meeting of the U.S. central bank.

China Driver

“China seems to be the big driver at the moment,” Chris Weston, chief markets strategist in Melbourne at IG Ltd., said by phone. “As long as China is stable and equity markets there aren’t in freefall, markets will generally go higher. We won’t rule out more volatility ahead of the U.S. Fed meeting next week.”

Japan’s broader Topix index surged 6.4 percent, the most since March 2011.
Japanese shares suffered the world’s second-steepest drop through Tuesday since China’s shock yuan devaluation last month, with Shanghai’s equity gauge the only one that fared worse.

“The selloff in Japanese equities has been excessive amid concerns over China’s economic slowdown,” said Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management, which oversees about $41 billion “Today’s rally can be sustained once the market’s perception of the Chinese economy improves.”

South Korea’s Kospi index advanced 3 percent. Taiwan’s Taiex index jumped 3.6 percent. Australia’s S&P/ASX 200 Index climbed 2.1 percent and New Zealand’s NZX 50 Index rose 1.1 percent. Singapore’s Straits Times Index added 1.2 percent, while India’s S&P BSE Sensex Index gained 1.5 percent.

China’s Shanghai Composite Index added 2.3 percent amid speculation the government will step up stimulus to revive the flagging economy. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong jumped 5.2 percent, while the city’s benchmark Hang Seng Index climbed 4.1 percent.

China Measures

China will accelerate construction of some major projects and step up efforts to remove fees and reduce tax burden on companies, the finance ministry said in a statement on its website. Fiscal stimulus will play a larger role in boosting growth in the second half of 2015, Nomura Global Markets Research analysts wrote in a report dated Wednesday. Global markets have rallied this week after central bank Governor Zhou Xiaochuan said over the weekend the plunge in Chinese equities is almost over.

E-mini futures on the Standard & Poor’s 500 Index added 1.1 percent. The underlying U.S. equity benchmark index jumped 2.5 percent on Tuesday.

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