Asian Stock Index Advances as China Shares Jump on Stimulus BetsAdam Haigh
Asian stocks rose, with the regional benchmark index on course for its biggest quarterly advance since the first three months of 2012, after China’s central bank indicated more stimulus is on the way.
Industrial & Commercial Bank of China Ltd. gained 2.7 percent in Hong Kong after People’s Bank of China chief Zhou Xiaochuan said yesterday economic growth has fallen “a bit” too much, and policy makers have scope to respond. Poly Real Estate Group Co. jumped 10 percent in Shanghai amid speculation the government will ease property curbs. ANA Holdings Inc. advanced 1.4 percent in Tokyo to pace gains among air carriers around the region as crude fell amid a deadlock over Iran’s nuclear program.
The MSCI Asia Pacific Index gained 0.1 percent to 146.74 as of 4:06 p.m. in Hong Kong, poised for a 6.4 percent advance this quarter, the largest since an 11 percent gain in the first quarter of 2012. Valuations rose last week to the highest in five years, with markets in China, Japan and Europe poised for rallies of more than 10 percent in the first quarter.
“Asia has got off to a positive start to the week, with China leading the region,” said Stan Shamu, Melbourne-based market strategist at IG Ltd. “Comments by PBOC Governor Zhou from the weekend have set the tone for Chinese equities with stimulus expectations ramping up.”
The Shanghai Composite surged 2.6 percent, extending its advance in the past 12 months to 86 percent. A gauge of China manufacturing slid to an 11-month low in March, a private report showed last week. Economists surveyed by Bloomberg News expect the PBOC will lower benchmark lending rates and banks’ required reserve ratios, adding to cuts made in recent months.
Property shares rallied the most since January 2008 in Shanghai amid speculation the PBOC was going to announce a cut in downpayment ratios for second homes, according to RBC Investment Management Asia Ltd. The central bank said it’s unaware of an afternoon briefing after Shanghai Securities News reported the monetary authority will make an “important” announcement at a 3:30 p.m. gathering.
The Hang Seng China Enterprises Index of mainland firms listed in Hong Kong jumped 3.4 percent, its biggest one-day increase this year, while the benchmark Hang Seng Index added 1.5 percent. Hong Kong Exchanges & Clearing Ltd. surged 7.9 percent as Chinese investors piled into the city’s stocks at a record pace after valuation discounts to Shanghai counterparts reached the widest in two years and the government allowed more mainland funds to purchase the shares.
Japan’s Topix index rose 0.3 percent. India’s S&P BSE Sensex Index gained 1.4 percent. South Korea’s Kospi index added 0.5 percent and Singapore’s Straits Times Index climbed 0.2 percent. New Zealand’s NZX 50 Index fell 0.6 percent.
Australia’s S&P/ASX 200 Index slid 1.3 percent. Caltex Australia Ltd. led declines, slumping 9.1 percent after Chevron Corp. sold a 50 percent stake in the nation’s largest fuel supplier.
West Texas Intermediate oil fell as much as 2.1 percent today in New York as Iranian and Western diplomats worked toward a nuclear deal that may lead to the Islamic Republic boosting crude exports, exacerbating the global supply glut.
E-mini futures on the Standard & Poor’s 500 Index added 0.7 percent. The underlying U.S. equity gauge capped a 2.2 percent weekly slide on Friday amid concern the stronger dollar will curb corporate profits for overseas earners.
Federal Reserve Chair Janet Yellen said Friday that she expects rates to be raised this year and that subsequent increases will be gradual without following a predictable path.