Asian Stocks Extend Advance to Four Days Amid Stimulus Hopes

  • Japan’s Topix on course for biggest weekly gain since 2009
  • South Korea central bank says monetary policy is accomodative

Asian stocks climbed for a fourth day, led by gains in Japan, amid optimism central banks across the region will keep monetary policy loose and major economies will add stimulus. Trading was halted shortly before noon in Singapore after a technical fault.

The MSCI Asia Pacific Index added 0.2 percent to 133.23 as of 4 p.m. in Hong Kong, bringing its four-day rally to 3.9 percent. Japan’s Topix index climbed 0.8 percent and the yen weakened amid speculation Japan could resort to so-called helicopter money, which involves the central bank directly funding government spending. The Kospi index added 0.2 percent as the Bank of Korea held its benchmark interest rate at a record low and brokerages including Goldman Sachs Group Inc. said expectations for more easing remain high.

“The recent rally we’ve had post the Brexit news is anticipation of additional stimulus,” said George Boubouras, chief investment officer at Contango Asset Management in Melbourne. “Stimulus will remain as a precondition for most economies. There’s no alternative to risk assets, you’ve got to go somewhere at the end of the day.”

More than $3 trillion has been restored to the value of global equities since the U.K. voted to leave the European Union on June 23. Asia Pacific shares have climbed to the highest level in nearly three months as investors bet central banks and governments will do more to aid growth. Japanese shares have led gains this week after Prime Minister Shinzo Abe’s party won upper-house elections and promised more stimulus.

Trading was halted in Singapore after a problem caused by duplicated trade confirmation messages, according to the Singapore Exchange Ltd. It’s at least the second malfunction to affect SGX’s systems in the past year after a near two-hour disruption in derivatives trading in August followed a technical fault.

South Korea’s central bank left interest rates unchanged at a record low, as forecast by all 20 economists in a Bloomberg survey, and lowered its projections for economic growth and inflation.

The Shanghai Composite Index retreated 0.2 percent from a three-month high as a technical gauge indicated Chinese shares were overbought for the first time since the height of a stock-market bubble in June 2015. The index has risen 15 percent since reaching this year’s low in January and its relative strength index exceeded 70 at Wednesday’s close, signaling to some investors a reversal was likely.

Australia’s S&P/ASX 200 Index gained 0.4 percent and New Zealand’s S&P/NZX 50 Index rose 0.2 percent, closing at a record high after surging more than any other major developed market gauge this year.

Nintendo Co. jumped 16 percent to a five-year high, the biggest gain on the MSCI Asia Pacific index, boosted by the success of Pokemon Go mobile game. That extends the gain this week to 56 percent. Sponsored locations and adverts could boost revenue from the game, according to Bloomberg Intelligence analysts.

Energy and material shares dropped after U.S. crude retreated Thursday on an unexpected increase in fuel stockpiles. BHP Billiton Ltd. fell 1.2 percent in Sydney and Woodside Petroleum Ltd. lost 1.1 percent.

Hong Kong’s Hang Seng Index rose 1.1 percent and Taiwan’s Taiex Index added 0.1 percent.

E-minis on the S&P 500 advanced 0.6 percent after the underlying cash index closed little changed at a record high on Wednesday. Yum! Brands Inc. beat second-quarter profit estimates and raised its forecast after the company’s KFC chain performed better than it expected in China. JPMorgan Chase & Co., Citigroup Inc. and BlackRock Inc. will also report results this week.

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