Optimism that the Federal Reserve will take a gradual approach to raising interest rates sent Asian equities toward their biggest weekly gain in more than a month and buoyed the region’s currencies. European stocks also rose while zinc advanced and oil traded near a three-month low.
The MSCI Asia Pacific Index rose 0.3 percent, extending Thursday’s 1.9 percent advance, as shares in New Zealand and Australia climbed with those in emerging markets. The Stoxx Europe 600 Index added 0.2 percent. Zinc jumped 2.1 percent. Crude in New York traded at $40.45 a barrel. Malaysia’s ringgit strengthened 1.4 percent. Investors showed few signs of unease after the U.S. central bank signaled this week it’s likely to raise interest rates next month.
“The Fed has made it clear that its base case is for a lift-off in December and if they were to break that, it would be a huge, market-moving event,” said Evan Lucas, Melbourne-based strategist at IG Ltd. “It’s been very positive for markets this week, with equities responding favorably to this macro picture.”
The Stoxx 600 is heading for a 3.3 percent weekly gain, and has rebounded about 12 percent since a low in September amid optimism that the European Central Bank will add to stimulus measures and the U.S. economic recovery is strengthening.
ABN Amro Group NV’s stock opened at 18.18 euros in its debut in Amsterdam on Friday. The company raised 3.3 billion euros in an initial public offering, allowing the Dutch government to recoup some of the funds spent bailing out the lender during the financial crisis. The bank sold 188 million shares at 17.75 euros apiece.
The Philippine PSEi Index jumped 1.6 percent and the Jakarta Composite Index rose 0.8 percent. Thailand’s SET Index climbed 0.7 percent and Vietnam’s Ho Chi Minh Stock Index was 0.4 percent higher. The MSCI Asia Pacific Index is up 1.7 percent on the week.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent, with the underlying gauge up 2.9 percent in the past four days.
Japan’s Topix index rose 0.2 percent on Friday, poised for a fifth straight weekly advance. Hong Kong’s Hang Seng Index gained 1.1 percent, as did the Hang Seng China Enterprises Index. Australia’s S&P/ASX 200 Index advanced 0.3 percent and New Zealand’s S&P/NZX 50 Index climbed 0.2 percent.
The ringgit advanced to 4.2845 per dollar, following a 1 percent gain on Thursday. The Bloomberg JP Morgan Asia Dollar Index, a measure of the region’s currencies, was 0.1 percent higher.
“Everyone’s backing away from the dollar and locking in profits,” said Michael Every, head of financial markets research at Rabobank Group in Hong Kong. “Nothing has changed for the positive for Malaysia. I still think we’ll test towards 4.50. We’ve got the dollar strengthening and softness in commodities and weakening in the Chinese currency yet to come.”
The yen was at 122.93 per dollar after gaining 0.6 percent on Thursday as the central bank left monetary policy unchanged and said “inflation expectations appear to be rising.” Governor Haruhiko Kuroda, who unleashed unprecedented monetary stimulus at the Bank of Japan in 2013 and doubled down on it last year, is done expanding his efforts, according to an increasing number of economists.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency versus 10 major counterparts, was up 0.2 percent Friday. The gauge’s 0.7 percent Thursday retreat saw the greenback slide most against the currencies of resources producers including New Zealand, Brazil and Australia. Commodity currencies have tumbled this year amid a collapse in raw materials prices and on concern the first U.S. rate increase since 2006 would further dent global growth.
Zinc climbed as much as 3.2 percent to $1,579.50 a metric ton on the London Metal Exchange, before trading at $1,563.50. LME copper was little changed at $4,630.50 a ton, poised for a sixth weekly decline.
Oil headed for a third weekly decline on signs a global glut will be prolonged amid the longest run of U.S. stockpile gains in seven months. West Texas Intermediate futures dropped below $40 a barrel Wednesday for the first time since August.
Gold held gains from a five-year low as Fed Vice Chairman Stanley Fischer said that U.S. policy makers have done their best to prepare international markets for higher borrowing costs. Bullion for immediate delivery was at $1,080.86 an ounce from $1,082.21 on Thursday, when prices gained 1.1 percent, according to Bloomberg generic pricing. Palladium and platinum rose 0.8 percent.