Asian Stocks Jump Most Since 2012 as Topix Surges on GPIF

Asian stocks rose, with the benchmark index posting the biggest advance in more than two years, as Japanese shares surged amid optimism the nation’s $1.2 trillion pension fund will boost stock holdings.

The MSCI Asia Pacific Index soared 2.2 percent to 136.67 as of 8:40 p.m. in Hong Kong, for its biggest rally since September 2012. Japan’s Topix index jumped 4 percent, the most since June 2013. Some 1,802 stocks on the first section of the Tokyo Stock Exchange rose, the most on record, according to the bourse.

The Asia Pacific gauge slumped last week to the lowest since March, extending its drop to more than 10 percent from a July 29 high, the common definition of a correction. Concern about an ailing European economy, the timing of Federal Reserve interest-rate increases and the spread of the Ebola virus wiped about $2.8 trillion off the value of global stocks in October through last week.

“The negativity we’ve seen over the past couple of weeks was way too exaggerated,” said Mikio Kumada, a Hong Kong-based global strategist at LGT Capital Partners. “Liquidity is still there if you think of what’s going on in Europe or in Japan, and the Fed is pretty flexible about responding to any shocks if necessary.”

Stock Movers

Toyota Motor Corp., the world’s biggest carmaker by market value, jumped 5.2 percent in Tokyo as the yen extended losses. NEC Corp., a Japanese maker of computers, increased 6.5 percent on a report first-half operating profit rose. Transfield Services Ltd. soared 27 percent in Sydney after the provider of outsourcing services entered talks with Ferrovial SA after turning down a preliminary buyout offer.

Japanese stocks surged after the Nikkei newspaper reported Oct. 18 that the Government Pension Investment Fund will raise its allocation target for domestic shares to about 25 percent from 12 percent.

The MSCI Hong Kong Index fell 0.2 percent after briefly erasing losses spurred by clashes between police and demonstrators that began last month. The Hang Seng Index rose 0.2 percent. The Shanghai Composite Index gained 0.7 percent.

Regional Indexes

A gauge of Indonesian shares added 0.2 percent as former Jakarta Governor Joko Widodo was sworn in as the nation’s seventh president. South Korea’s Kospi index rose 1.6 percent, Australia’s S&P/ASX 200 Index climbed 0.9 percent and New Zealand’s NZX 50 Index advanced 1 percent. Singapore’s Straits Times Index rose 0.4 percent.

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. The underlying measure rebounded 1.3 percent on Oct. 17 as earnings beat estimates, consumer confidence reached a seven-year high and investors speculated that central banks will add more economic stimulus.

The S&P 500 is still down 6.2 percent from a record in September on concern a global slowdown will hurt the American economy just as the Fed weighs when to raise interest rates. Pressure is mounting for European Central Bank stimulus such as government-bond purchases as the 18-nation euro area struggles to rebound from a sovereign debt crisis and subsequent austerity measures.

China Economy

China’s top Communist Party officials gather in Beijing this week for their fourth plenum, with an update on gross domestic product for Asia’s largest economy due tomorrow. China’s gross domestic product probably grew 7.2 percent in the third quarter from a year earlier, according to the median of economists’ estimates compiled by Bloomberg. That would be a retreat from the 7.5 percent expansion recorded for the three months through June and the slowest quarterly pace of growth since 2009.

The People’s Bank of China plans to inject about 200 billion yuan ($32.7 billion) into some national and regional lenders, a government official familiar with the matter said Oct. 17.

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