Asian Stocks Rise Most in Three Weeks on U.S. Debt Talk
Asian stocks rose the most in three weeks amid optimism U.S. lawmakers will lift the debt limit and avoid a default.
Great Wall Motor Co. added 2.8 percent in Hong Kong after the carmaker reported sales increased last month. Westpac Banking Corp. contributed the most to the regional benchmark’s advance, gaining 2.5 percent in Sydney after agreeing to buy Lloyds Banking Group Plc’s assets in Australia. Fast Retailing Co., Asia’s largest clothing retailer, fell 3.2 percent in Tokyo after forecasting profit that missed analyst estimates.
The MSCI Asia Pacific Index jumped 1.3 percent to 140.98 as of 7:35 p.m. in Tokyo, its steepest daily advance since Sept. 19. Talks will continue as Republicans and Democrats seek a “path forward” on the debt ceiling, according to Republican House Majority Leader Eric Cantor. The White House said “no specific determination was made” during an initial meeting between the parties in Washington.
“Both sides are trying to step away from that cliff next week,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about A$170 billion ($161 billion). “People are assuming there will be some resolution before the 17th, but there’s clearly a long way to go.”
Futures on the Standard & Poor’s 500 Index were little changed. The U.S. equity gauge jumped 2.2 percent yesterday, the biggest rally since January. House Speaker John Boehner and other party leaders met with President Barack Obama for more than an hour at the White House to discuss delaying the lapse in U.S. borrowing authority to Nov. 22 to Oct. 17 without attaching policy conditions.
Separately, claims for U.S. jobless benefits jumped last week to the highest level in six months, a Labor Department report yesterday showed, providing the first statistical warning that the damage from the partial federal shutdown is starting to ripple through the economy.
The MSCI Asia Pacific Index climbed 1.4 percent this week, after its fourth straight daily advance.
Taiwan’s Taiex Index rose 0.1 percent as markets reopened following a holiday. Singapore’s Straits Times Index added 0.6 percent. Hong Kong’s Hang Seng Index (HSI) gained 1.2 percent. China’s Shanghai Composite Index added 1.7 percent.
China is scheduled to release a series of economic reports over the weekend including September trade data. China’s economy may grow about 7 percent for the “foreseeable future,” as policy makers rein in house-price gains and local government debt, Deputy Central Bank Governor Yi Gang said yesterday.
“It looks like it stabilized after growth slowed down in the first half of the year,” said Halmarick at Colonial.
Hong Kong Exchanges & Clearing Ltd. yesterday announced it raised the discount for using some U.S. Treasury bills as collateral to take into account a possible U.S. default. The change only affects the clearing house for index futures and options, bourse spokeswoman Lorraine Chan said.
Great Wall Motor added 2.8 percent to HK$46.20 after September sales volume increased 8.1 percent to 66,079 units. Geely Automobile Holdings Ltd. dropped 3.5 percent to HK$4.11 after the carmaker said it achieved 67 percent of its full-year sales target as of the end of September.
Westpac gained 2.5 percent to A$32.99 after agreeing to buy Lloyds Banking’s Australian assets as tighter capital rules following the 2008 financial crisis prompt European and U.S. lenders to retreat from the Asia-Pacific region. The A$1.45 billion ($1.37 billion) transaction includes an A$8.4 billion leasing and corporate loan portfolio, Sydney-based Westpac said.
Fast Retailing lost 3.2 percent to 33,450 yen. Net income will probably be 92 billion yen ($936 million) for the year ending August 2014, the maker of Uniqlo casual apparel said yesterday in a statement after the market closed. That’s lower than the 99.3 billion yen average of 19 analyst estimates compiled by Bloomberg.
Singapore Exchange Ltd., Southeast Asia’s biggest bourse, plans to add circuit breakers by early next year after a plunge in shares of three commodity companies erased $6.9 billion in market value over three days. The bourse operator imposed trading restrictions this week on Blumont Group Ltd., Asiasons Capital Ltd. and LionGold Corp. after their stock prices plunged.
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