Asian Stocks Heading for Week High as China Shares Climb

Asian stocks rose for a fourth day, heading for a one-week high, as Chinese shares rallied amid optimism for next week’s exchange link with Hong Kong.

Haitong Securities Co. jumped to a record high as brokerages rallied in China and Hong Kong. Rakuten Inc., the operator of Japan’s largest online mall, surged 5.6 percent amid speculation the nation will delay another increase to its sales tax. Hyundai Heavy Industries Co. soared 11 percent after the South Korean shipbuilder won a $2 billion order. BOC Hong Kong Holdings Ltd. jumped 3.8 percent after the city lifted its cap on yuan conversion.

The MSCI Asia Pacific Index added 0.2 percent to 141.23 as of 4:44 p.m. in Hong Kong. China’s Shanghai Composite Index rose 1 percent to its highest close since November 2011 as the stock link approaches on Nov. 17. Hong Kong’s Hang Seng Index climbed 0.6 percent, with BOC leading gains.

“The opening of the share connect program next week has seen the Shanghai Composite surging to four-year highs,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said in an e-mail. “This is unlikely to slow down, as the market gears up for the expected increase in trade and exposure to foreign funds.”

The Topix index added 0.1 percent, paring gains after advancing as much as 1.3 percent amid reports Prime Minister Shinzo Abe is considering postponing the additional increase to the consumption levy and preparing to call snap elections next month.

Japan Growth

Investors are awaiting a Nov. 17 report on Japan’s third-quarter economic growth, which will help Abe decide on another sales-tax increase next year. Abe told reporters yesterday at the Asia-Pacific Economic Cooperation forum in Beijing that he hadn’t made a decision on dissolving parliament.

“Abe may come through the elections with increased power and a fresh mandate for change,” Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone today. “It will be interesting to see how far he can go.”

The Topix has advanced 7.7 percent since Oct. 30, the day before the Bank of Japan expanded stimulus and the nation’s pension fund said it will boost domestic stock holdings.

Regional Gauges

South Korea’s Kospi index gained 0.2 percent. Taiwan’s Taiex index slipped 1.3 percent and Singapore’s Straits Times Index fell 0.4 percent. New Zealand’s NZX 50 Index lost 0.1 percent. Australia’s S&P/ASX 200 Index slid 1 percent.

Futures on the Standard & Poor’s 500 Index dropped 0.1 percent. The equity benchmark yesterday added 0.1 percent, rising for a fifth day and extending an all-time high.

The S&P 500 has rebounded 9.5 percent from a six-month low in October amid better-than-estimated corporate results and signs the economy is weathering a global slowdown and the end of the Federal Reserve’s bond-buying program. About 5.5 billion shares traded hands yesterday, the fewest in two months.

“We may see some consolidation in the U.S. markets following the recent rally,” Desmond Chua, a Singapore-based strategist at CMC Markets, said by phone. “Investors are probably sitting on the sidelines, waiting for key economic data to validate whether current lofty valuations are justifiable.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE