Asia Stocks Little Changed Before European Central Bank DecisionAdam Haigh
Asia’s benchmark stock gauge was little changed as investors awaited a European Central Bank decision today on quantitative-easing strategy. Chinese shares rallied as the People’s Bank of China pumped funds into the financial system.
Bridgestone Corp. sank 1.7 percent as tiremakers led a decline among Japanese shares. JG Summit Holdings Inc. tumbled 11 percent in Manila, the largest decline on the region’s benchmark gauge, after the consumer-foods group raised $200 million selling discounted shares. China Vanke Co. and Poly Real Estate Group Co. climbed more than 2 percent in mainland trading after a report China may allow companies to deduct costs for newly purchased real estate from taxes this year.
The MSCI Asia Pacific Index fell less than 0.1 percent to 139.63 as of 4:02 p.m. in Hong Kong. An ECB Executive Board proposal calls for as much as $1.3 trillion in asset purchases through the end of 2016, according to two euro-area central-bank officials who have seen the document.
“I’m not convinced that even a 1 trillion euro package will be enough to save the euro area,” said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual Ltd., which has about $21 billion in funds under management. “It may be the case that this process has dragged on so long it’s mostly factored into financial market prices.”
Japan’s Topix index slid 0.1 percent. New Zealand’s NZX 50 Index lost 0.5 percent, retreating from yesterday’s record close. Australia’s S&P/ASX 200 Index advanced 0.5 percent. South Korea’s Kospi index was little changed. Singapore’s Straits Times Index gained 0.5 percent, while India’s BSE S&P Sensex Index advanced 0.3 percent.
The ECB proposal could still be changed significantly, the people said, asking not to be identified as it is confidential. Purchases won’t start before March 1, one of the people said. The central bank will announce its policy decision today.
The Shanghai Composite Index rose 0.6 percent to cap a three-day advance. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong added 0.2 percent, while the city’s benchmark Hang Seng Index climbed 0.7 percent. The PBOC conducted its first reverse-repurchase operation in a year, adding money to the financial system after saying it rolled over a 269.5 billion yuan ($43.4 billion) lending facility to banks ahead of next month’s Chinese New Year holiday.
China will avoid a hard landing and will ensure an “appropriate” pace of growth, Premier Li Keqiang said Wednesday in a speech at the World Economic Forum in Davos. The nation’s economic expansion in 2014 slowed to its weakest pace in 24 years and a real-estate developer’s failure to meet an interest payment is raising the specter of a pickup in debt defaults.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent after the underlying measure advanced 0.5 percent yesterday. Profit at S&P 500 companies probably climbed 0.8 percent in the final three months of 2014, analysts predicted, down from an October estimate of 8.1 percent.