Asian Stocks Climb Amid Global Rebound; Japan Rally Evaporates

  • MSCI Asia Pacific gauge pares losses for month and quarter
  • Topix erases gain as yen rises while Manila rally fades away

Most Asian stocks tracked a global rebound as anxiety over the U.K. leaving the European Union diminished amid speculation central banks will support financial markets. Japanese and Philippine equities erased early rallies.

The MSCI Asia Pacific Index advanced 0.8 percent to 128.65 as of 4:16 p.m. in Hong Kong, after jumping 1.8 percent on Wednesday. The gauge has pared its monthly and quarterly losses. Most markets are regaining momentum after being roiled by last week’s U.K. vote to leave the EU. A gauge of global equities posted its steepest two-day gain since August as central banks around the world signaled a readiness to act if required in the aftermath of the so-called Brexit.

Federal Reserve Bank of St. Louis President James Bullard is due to speak Thursday in London and may shed light on the U.S. interest-rate outlook after futures indicated the next increase is unlikely to come before 2018. Bank of England Governor Mark Carney will also speak to members of the media and finance industry in a message of reassurance.

“Speculation the Federal Reserve will back away from raising rates and other central banks stepping up stimulus has helped boost sentiment,” Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty in Sydney, said by phone. “While Brexit may cause an economic slowdown in the U.K. and Europe, I’m much less concerned on Brexit’s impact to Asia. To some extent Asia is buffered.”

While Asian benchmark indexes for both developed and emerging markets continued to recover most of their losses from last week, Tokyo and Manila saw stock rallies cut short on Thursday, and shares in Shanghai fell for the first time in four days.

Japan’s Topix index finished 0.2 percent lower, erasing earlier gains of as much as 1.3 percent, as exporters slid after the yen strengthened. The gauge capped its worst six-month decline since the depths of the global financial crisis, posting a 7.5 percent drop this quarter after a 13 percent plunge in the first three months of the year. The yen rose 0.2 percent to 102.58 per dollar, reversing losses of as much as 0.2 percent.

A 2.3 percent rally in Manila stocks was wiped out after the Philippine Stock Exchange Index touched the highest level since April 2015. Rodrigo Duterte was sworn in as president on Thursday. The benchmark gauge has surged 12 percent since he won the May 9 election, promising to curtail crime and spread wealth and power outside the capital.

“Price gains have been quite substantial while valuations are on the high side, making it attractive for some investors to take some money off the table,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. “The long-term outlook remains favorable.”

Southeast Asian stocks have been quick to shrug off the post-Brexit blues. The Jakarta Composite Index added to gains after entering a bull market on Wednesday on the passing of a tax amnesty bill. Singaporean equities are headed for the biggest three-day rally since March.

Regional Gauges

South Korea’s Kospi index rose 0.7 percent, bringing its weekly gain to 2.3 percent. Australia’s S&P/ASX 200 Index advanced 1.8 percent. New Zealand’s S&P/NZX 50 Index climbed 1.4 percent. Taiwan’s Taiex added 0.9 percent.

Hong Kong’s Hang Seng Index rose 1.8 percent, its biggest advance in more than a month. HSBC Holdings Plc and CK Hutchison Holdings Ltd., among companies most closely tied to Europe, added to Wednesday’s rebound as anxiety over Brexit abated. China’s Shanghai Composite Index fell less than 0.1 percent, halting a three-day rally.

China Overseas Land & Investment Ltd. climbed 6.3 percent in Hong Kong after announcing details of a proposed deal that enables the developer to purchase the Chinese residential assets of Citic Ltd. Golden Agri-Resources Ltd. gained 4.5 percent in Singapore as crude palm oil futures headed for their first gain this week.

Futures on S&P 500 Index increased 0.1 percent. The U.S. equity benchmark index climbed 1.7 percent on Wednesday, bringing its two-day advance to 3.5 percent, the most in four months.

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