Asian Stocks Advance Most in Seven Weeks as Topix Jumps

Asian stocks advanced, with the benchmark index posting its biggest rally in more than seven weeks, as Japanese shares led gains and Chinese developers surged.

Mitsui Mining & Smelting Co., a maker of lead and copper alloys, jumped 7.4 percent in Tokyo after raising its full-year profit forecast. Sunac China Holdings Ltd. soared 9.3 percent in Hong Kong, with the developer posting its highest close in 18 months, on prospects for further easing of mainland property curbs. Malaysian Airline System Bhd. advanced 8.3 percent after sovereign wealth fund Khazanah Nasional Bhd. offered to take the carrier private.

The MSCI Asia Pacific Index climbed 1.2 percent to 145.86 as of 6:47 p.m. in Hong Kong, for its biggest jump since June 19. The measure sank 1.4 percent Aug. 8, its steepest drop since May 7, as U.S. President Barack Obama authorized air strikes against militants in Iraq.

“It’s a rebound from last week’s slump,” said Tatsushi Maeno, head of Japanese equities at PineBridge Investment Japan Co. in Tokyo, which oversees about $2.9 billion. “Stocks have been sold a lot because of geopolitical risks, but I don’t think this is the beginning of a bear market. Our main scenario remains the same: shares will rise toward the end of this year as the U.S. economy expands.”

Futures on the Standard & Poor’s 500 Index gained 0.4 percent today. The measure rose 1.2 percent on Aug. 8, the most since March 4, after Russia said warplanes ended drills near Ukraine.

Regional Gauges

Japan’s Topix jumped 2 percent today, rebounding from a 2.4 percent slump on Aug. 8 after a report the nation’s pension fund freed itself to buy more domestic equities. South Korea’s Kospi index climbed 0.4 percent. Australia’s S&P/ASX 200 Index added 0.4 percent, while New Zealand’s NZX 50 Index slid 0.1 percent. Markets in Thailand are closed through tomorrow for holidays.

The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong advanced 1.9 percent and the city’s benchmark Hang Seng Index added 1.3 percent after mainland inflation data signaled policy makers still have room for monetary easing amid a lack of pressure on prices.

China’s Shanghai Composite Index gained 1.4 percent. Taiwan’s Taiex Index added 1 percent. Singapore’s Straits Times Index rose 0.5 percent and India’s S&P BSE Sensex Index climbed 0.8 percent.

Geopolitical Risks

Pakistan stocks tumbled, with the benchmark KSE 100 Index losing 4.5 percent, on growing concern that a planned protest against Prime Minister Nawaz Sharif will spur political instability.

Iraqi Prime Minister Nouri al-Maliki deployed troops and tanks on the streets of Baghdad as he resists Obama’s push for a more inclusive Iraqi government.

Ukraine’s military has demanded pro-Russia rebels in the former Soviet republic’s east surrender, dismissing the insurgents’ offer of a cease-fire as they push ahead with their campaign. A rebel leader broached the possibility of a truce during the weekend, saying in a statement that militants will continue to fight should Ukraine not end its offensive. Russian Foreign Minister Sergei Lavrov said a cease-fire is “urgently needed,” saying the region faced a humanitarian catastrophe.

Israel and Gaza Strip militants began to observe another Egypt-brokered truce, giving negotiators time to craft a more enduring accord after a month of violence in the Hamas-ruled territory.

Chinese developers rose as first-tier city Shenzhen plans to make small adjustments to property policies and scrap limits on home prices, China Times reported, citing an unidentified person familiar with the matter. Sunac China jumped 9.3 percent to HK$6.72 and China Resources Land Ltd., the second-biggest mainland developer listed in Hong Kong, advanced 5.7 percent to HK$17.80.

China Inflation

China’s consumer price index rose 2.3 percent in July from a year earlier, the government said Aug. 9, the same pace as in June and also the median estimate in a Bloomberg News survey. Factory-gate prices fell 0.9 percent, matching projections and extending the longest stretch of declines since 1999.

China loosened monetary conditions last quarter at the fastest pace in almost two years, a Bloomberg LP gauge showed, testing the waning effectiveness of credit in supporting economic growth. Bloomberg’s new China Monetary Conditions Index -- a weighted average of loan growth, real interest rates and China’s real effective exchange rate -- rose 6.71 points to 82.81 in the second quarter from the previous three months.

Mitsui Mining jumped 7.4 percent to 305 yen after raising its annual profit forecast 14 percent to 17.1 billion yen ($167 million). Analysts had expected 16.3 billion yen.

Earnings Analysis

Of the companies on the Asian stock gauge that released results from the start of July through Aug. 8 and for which Bloomberg had estimates, 59 percent beat earnings expectations.

Malaysian Airline advanced 8.3 percent to 26 sen after Khazanah offered 1.38 billion ringgit ($432 million) to take the national carrier private.

Treasury Wine Estates Ltd. rose 3.9 percent to A$5.33 in Sydney after U.S. buyout firm TPG Capital offered A$3.4 billion ($3.2 billion) for the world’s second-biggest listed winemaker, according to a person familiar with the matter, matching a takeover bid by KKR & Co. and Rhone Capital LLC.

The Asia-Pacific equity gauge traded at 13.4 times estimated earnings, compared with 16.2 for the S&P 500 and 14.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

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