Asian Stocks Extend One-Year High as Commodity Shares Lead Rally

CMC's McCarthy: Asia Is the Market Winner
  • U.S. jobs report sent gauge to highest since August on Monday
  • Shanghai Composite Index advances to highest in two weeks

Asian stocks rose to the highest level in almost a year as commodity producers rallied after Chinese data bolstered optimism that the world’s second-largest economy is stabilizing.

The MSCI Asia Pacific Index added 0.5 percent to 138.22 as of 4:10 p.m. in Hong Kong, its fourth day of gains. The measure jumped 1.3 percent on Monday to the highest close since Aug. 17 after a strong U.S. payrolls report. Japan’s Topix index added 0.9 percent as oil stocks advanced. Markets from Vietnam to South Korea and the Philippines climbed and the Shanghai Composite Index reached a two-week high. Data showed China’s factory-gate deflation eased for the seventh straight month, signaling improving conditions for the nation’s manufacturers.

“There is more optimism in emerging markets recently since the market turnaround from the Brexit vote,” said Geoffrey Ng, who oversees $260 million as an investment adviser at Fortress Capital Asset Management Sdn. in Kuala Lumpur. “The positive momentum should continue” into the fourth quarter, he said.

After a choppy start to the year, the Asian benchmark gauge has climbed about 22 percent from a February low, shrugging off the effects of Britain’s vote to leave the European Union as central banks unleash further monetary easing while data spurs confidence in the world’s largest economy. Still, Japan’s Topix has dropped 15 percent in 2016, hurt by a surging yen, while a gauge of Shanghai stocks has fallen by about the same amount.

South Korea’s Kospi index closed at the highest level in nine months, its fourth day of gains. S&P Global Ratings said on Monday it raised the country’s credit rating one level to AA, its third-highest investment grade. Australia’s S&P/ASX 200 Index climbed 0.3 percent and New Zealand’s S&P/NZX 50 Index added 0.2 percent.

India’s S&P BSE Sensex index retreated 0.6 percent after the Reserve Bank of India left interest rates unchanged as food prices threaten to push inflation above the nation’s target. Thailand’s SET Index rallied for a fifth day after reaching a 15-month high Monday following a national vote that approved a new military-backed constitution.

China Stabilizes

The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong rose 0.3 percent after climbing to a seven-month high on Monday, while the Shanghai Composite posted its steepest two-day increase since July 13. Data in coming days are projected to confirm the stabilization in growth achieved in the first half of this year continued into July. Hong Kong’s Hang Seng Index retreated 0.1 percent, halting a three-day rally.

Futures on the S&P 500 Index were little changed. The U.S. equity benchmark index fell 0.1 percent on Tuesday as losses in health-care and consumer companies overshadowed gains in energy shares. The Nasdaq Composite Index also dropped from a record.

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