Asian Stocks Rise on Low Volume as China Signals More Stimulus

  • China calls for `flexible' monetary policy to support reforms
  • Volume in Australia, Hong Kong at least 30% below average

Asian stocks rose in thin trading as investors weighed the prospect of more stimulus from Chinese leaders. Energy and utility shares led the advance.

The MSCI Asia Pacific Index added 0.3 percent to 130.42 as of 7:12 p.m. in Hong Kong, with volume in Australia, Hong Kong, India and Malaysia at least 20 percent below the 30-day average. Equity markets were primed for gains after the Standard & Poor’s 500 Index rebounded on Monday from its biggest two-day loss in three months.

The Shanghai Composite Index rose 0.3 percent as the Chinese government signaled more stimulus measures at a top economic conference, saying monetary policy must be more “flexible” and fiscal policy more “forceful” to combat slowing growth. The gauge has rallied 20 percent this quarter after China took unprecedented measures to stabilize equities following a $5 trillion rout earlier this year.

“We’ve had easing on multiple fronts in China and we are starting to see the green shoots of recovery there,” said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors Ltd., which oversees about $114 billion. “We should see China’s economy turn the corner in 2016 and the U.S. dollar peaking."

Australia’s S&P/ASX 200 Index climbed 0.2 percent with volumes 30 percent below the 30-day average. Hong Kong’s Hang Seng Index added 0.2 percent with about 37 percent fewer shares changing hands compared with the past month.

Asian shares are on course for their first back-to-back annual declines since 2002 as a commodity rout deepens and Chinese growth decelerates. The drop in crude prices this year has pushed oil to the lowest levels since before the financial crisis, threatening to keep inflation from meeting central bank targets in Europe and America.

The MSCI Asia Pacific Index is down 5.4 percent this year, about three times that of the S&P 500, which has dropped 1.8 percent. The Asian gauge trades at 13.8 times estimated earnings, compared with 17.1 for the S&P 500 and 15.5 for the Stoxx Europe 600 Index.

Japan’s Topix index gained 0.2 percent. The nation’s markets are closed Wednesday for a holiday.

Toshiba Corp. fell 12 percent, bringing its two-day decline to 21 percent, as it forecast a record net loss of 550 billion yen for the current fiscal year as it seeks to cope with the fallout from its ongoing accounting scandal.

McDonald’s Holdings Co. Japan Ltd. sank 7.9 percent after the Nikkei reported its U.S. parent is considering selling as much as a third of its stake in the Japan unit.

Regional Gauges

South Korea’s Kospi index rose 0.6 percent and New Zealand’s S&P/NZX 50 Index gained 0.4 percent. Singapore’s Straits Times Index added 0.3 percent.

Singapore’s stocks are set for a 15 percent tumble this year, putting them in the same league as Greece. Baring Asset Management Ltd. and UBS Group AG say shares need to get even cheaper before they’re prepared to buy. Following this year’s slump, shares on the MSCI Singapore Index trade at 1.1 times the value of its companies’ net assets, compared with a multiple of 2 on a measure of global equities. The gap between the two widened this month to the most since May 2003.

Futures on the S&P 500 rose 0.1 percent. U.S. stocks surged in the final minutes of trading Monday, rebounding after the biggest two-day rout in three months as financial and technology companies led gains from equities’ lowest levels since October.

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