Asian Stocks Rise Before Fed Decision on Bond PurchasesAdam Haigh
Asian stocks rose before the Federal Reserve decides later today whether to slow its $85 billion of monthly asset purchases.
Sharp Corp. climbed 1.6 percent in Tokyo as consumer discretionary companies led gains on the Asia-Pacific benchmark index. Kawasaki Heavy Industries Ltd. surged 4.7 percent to a six-year high amid unconfirmed reports the Japanese manufacturer secured a 180 billion-yen ($1.8 billion) railcar order. Kansai Electric Power Co. slid 1.9 percent in Tokyo after the utility halted units at two power plants.
The MSCI Asia Pacific Index gained 0.4 percent to 138.72 at 7:44 p.m. in Hong Kong as eight of the 10 industry groups on the equity benchmark advanced. Futures on the Standard & Poor’s 500 Index rose 0.1 percent.
“Any sort of announcement, whether it’s zero tapering or $5 billion or $10 billion is going to have an effect on the market no matter what,” Nick Maroutsos, Sydney-based managing director and co-founder of Kapstream Capital, which oversees about $5 billion, said by telephone. “What we do know is that it’s going to be a very, very gradual withdrawal of stimulus. We are bullish on equities.”
Japan’s Topix index climbed 1 percent to a six-week high, with volume 35 percent above the 30-day average. Australia’s S&P/ASX 200 Index slid 0.3 percent from a five-year high and New Zealand’s NZX 50 Index rose 0.1 percent.
Hong Kong’s Hang Seng Index slipped 0.3 percent and Taiwan’s Taiex Index slid 0.5 percent. China’s Shanghai Composite Index added 0.3 percent, while Singapore’s Straits Times Index climbed 0.4 percent. South Korea’s equity market is closed today for a holiday.
The Federal Open Market Committee is meeting to consider whether it will taper its $85 billion a month in bond buying. Analysts are divided on the amount by which the Fed will scale back its monthly asset purchases. Among 64 economists surveyed by Bloomberg News, 33 predict it will reduce its buying of Treasuries by $5 billion or less, with 31 forecasting a cut of $10 billion or more.
“It’s so up in the air right now that no one really knows what to expect,” said Maroutsos. “To say things are largely priced into the market is a bit naive. Now that we’re getting data that’s relatively positive, with the jobs market on the right footing and the housing market doing better, this should all be stock-market positive.”
Speculation over the future of the Fed’s quantitative easing program has whipsawed global assets since May, when Chairman Ben S. Bernanke first signaled cuts may start in 2013. The Asia-Pacific index climbed to a four-month high this week after former Treasury Secretary Lawrence Summers withdrew his bid to be the next Fed chairman.
The MSCI Asia Pacific Index’s 6.8 percent rally in 2013 though yesterday has lagged a 20 percent surge in the S&P 500 Index amid concern economic growth in China is slowing.
Japan’s Topix index climbed 39 percent this year, the most among developed markets, amid optimism Prime Minister Shinzo Abe and the Bank of Japan can lead the country out of deflation through unprecedented monetary easing. About 13 trillion yen ($131 billion) was added to the market capitalization of the Topix last week after the city’s winning bid for the 2020 Olympic Games was announced, data compiled by Bloomberg show.
Sharp Corp., which supplies Apple Inc. with liquid-crystal displays, climbed 1.6 percent to 376 yen. After the market closed, the company said it will raise 149 billion yen selling shares.
Kawasaki Heavy rose 4.7 percent to 404 yen. TV Tokyo reported the machinery maker will supply 676 rail cars for a project in New York’s Long Island that will begin in 2017.
Kansai Electric dropped 1.9 percent to 1,206 yen in a second day of declines. The company halted the No. 3 unit at its oil-fired Gobo power plant and No. 1 unit at the coal-fired Maizuru power plant in western Japan, according to statements on the utility’s website.
Gold producers retreated as the price of the precious metal slid a third day. Silver Lake Resources Ltd. declined 4.3 percent to 77.5 Australian cents and Paladin Energy Ltd. dropped 6.4 percent to 51 Australian cents.
Prada SpA, an Italian maker of luxury handbags, fell 1.4 percent to HK$78.50 in Hong Kong after missing first-half profit estimates. The company said the euro’s strength will weigh more heavily on full-year earnings than some analysts anticipate.