Asian Stocks Rise Ahead of ECB Bond-Buying Announcement
Asian stocks rose, with the regional benchmark index poised for the first gain in six days, as investors await a European Central Bank meeting. Material and energy companies climbed as oil and copper prices increased.
HSBC Holdings Plc (5), Europe’s biggest lender, rose 1.6 percent in Hong Kong. Lynas Corp. surged 41 percent in Sydney after it said Malaysia issued a temporary operating license for a rare-earths refinery. Yamaha Motor Co., Japan’s second-largest motorcycle maker, soared 11 percent after its chief executive officer said sales in Indonesia are likely to surpass the company’s goal.
The MSCI Asia Pacific Index rose 0.3 percent to 116.14 as of 7:41 p.m. in Tokyo, rebounding from the lowest close since July 26. ECB President Mario Draghi has proposed unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said.
“Europe has been a source of tail risk for markets for the last two years,” said Prasad Patkar, a portfolio manager who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “If that risk is addressed in a credible manner, the scene could be set for a relief rally in risk assets.”
The MSCI Asia Pacific Index fell 1.2 percent this quarter through yesterday as signs of a global economic slowdown overshadowed expectations for further stimulus measures. The Asian benchmark traded at 12.1 times estimated earnings, compared with 13.6 times for the Standard & Poor’s 500 Index (SPXL1) and 11.6 times for the Stoxx Europe 600 Index.
Australia’s S&P/ASX 200 gained 0.8 percent after the nation’s jobless rate fell last month even as employers cut payrolls, supporting traders’ bets that the central bank will resume interest-rate cuts. South Korea’s Kospi Index (KOSPI) added 0.4 percent even after the economy expanded last quarter at a slower pace than initially estimated.
Japan’s Nikkei 225 Stock Average was little changed and New Zealand’s NZX 50 Index gained 0.7 percent.
Hong Kong’s Hang Seng Index added less than 0.3 percent. The Shanghai Composite Index climbed 0.4 percent even after Goldman Sachs Group Inc. cut its forecast for China’s economic growth. Reports this weekend are expected to signal further slowing in the world’s second-largest economy.
Taiwan’s Taiex Index (TWSE) declined 0.6 percent and Singapore’s Straits Times Index slid 0.2 percent. Futures on the Standard & Poor’s 500 Index rose 0.7 percent today after the gauge fell 0.1 percent in New York yesterday.
To sterilize bond purchases, the ECB will remove from the system elsewhere the same amount of money it spends, ensuring the program has a neutral impact on the money supply. The central bank convenes today.
Companies that do business in Europe rose. HSBC added 1.6 percent to HK$67.25. Mobile-phone maker LG Electronics Inc. (066570), which depends on Europe for 16 percent of its revenue, gained 1.4 percent to 70,400 won in Seoul.
Investors are also awaiting a U.S. monthly unemployment report tomorrow. Payrolls probably grew at a weaker pace in August and unemployment exceeded 8 percent for a 43rd month, economists forecast before the Labor Department report. Federal Reserve Chairman Ben S. Bernanke said in Jackson Hole, Wyoming, last week he wouldn’t rule out more stimulus to revive growth.
“Markets will continue to be in a wait-and-see pattern,” said Patkar at Platypus Asset. “There are a lot of events that are likely to keep investors from committing in a major way over the next week.”
Lynas, developing the world’s largest rare-earth refinery in Malaysia, jumped 41 percent to 84 Australian cents after winning a permit to start production in Malaysia following months of delays.
Billabong International Ltd., a surfwear maker, gained 7.5 percent to A$1.365 in Sydney after receiving a A$694 million ($710 million) offer from Bain Capital Partners LLC, setting up a possible bidding war with rival suitor TPG International LLC.
Among stocks that fell, Brilliance China Automotive Holdings Ltd. lost 6.8 percent to HK$7.04 after saying its controlling shareholder Huachen Automotive Group plans to sell 125 million shares at HK$7.17 each. The shares closed at HK$7.55 yesterday.
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