Asia Stocks Rise as U.S. Consumer Spending Buoys Economic Growth

  • Australian volumes down about 45% as Christmas approaches
  • Japanese stock markets shut for national holiday Wednesday

Asian stocks rose in low trading volumes after a report showed American consumer spending supported growth in the world’s largest economy and gains in crude oil boosted energy shares.

The MSCI Asia Pacific excluding Japan Index gained 0.7 percent to 409.99 at 4:01 p.m. Hong Kong time. The Hang Seng Index gained 1 percent, with about one-quarter of the usual shares changing hands, and Australia’s S&P/ASX 200 Index climbed 0.5 percent, with volume about 45 percent below its 30-day average. South Korea’s Kospi index rose 0.3 percent, with Japanese markets closed for a holiday. Energy and materials shares, this year’s worst performers, led gains.

Climbing oil prices and a rally in U.S. shares laid the groundwork for advances in Asian indexes on Wednesday. The Standard & Poor’s 500 Index gained for a second day Tuesday as figures showed gross domestic product climbed at a revised 2 percent annualized rate last quarter and West Texas Intermediate rose above $36 a barrel.

“Consumer spending looks like it’s helping the U.S. economy,” James Lindsay, an Auckland-based fund manager at Nikko Asset Management Co., which manages $160 billion globally, said by phone. “Volumes tend to get pretty light at this time of year. Markets have had a reasonable run and value is a lot harder to come by. The key things are still what happens with China, the flow-on effects into commodities and what the Fed does and how that affects sentiment and currencies.”

Household purchases propelled U.S. demand last quarter as employment improved and fuel prices remained low, the latest evidence of the consumer resilience that gave Federal Reserve policy makers confidence that the economy can withstand the first interest-rate increase in almost a decade. Asian equities are on course for the first back-to-back annual losses since 2002 amid concern decelerating Chinese growth will harm the global economy just as the Fed raises borrowing costs.

The Hang Seng China Enterprises Index of mainland Chinese companies trading in Hong Kong rose to a three-week high as brokerages rallied after Guotai Junan International Holdings Ltd. said its chairman will resume his duties and Haitong Securities Co. halted a share buyback plan announced during the midst of the rout in mainland stocks.

Crisis Risk

Hao Hong, one of the few forecasters to predict both the start and peak of China’s equity boom, is now warning the nation will be buffeted by the same forces that caused financial crises around the world over the past four decades.

Bocom International Holdings Co.’s chief China strategist in Hong Kong says a shortage of dollars was the common feature in the oil rout in the 1970s, Latin American debt turmoil in the 1980s, the Asian currencies collapse in 1997 and the global crisis in 2008. Next year will see Federal Reserve interest-rate increases, an improving U.S. current-account balance and a stronger greenback, putting strains on the most-leveraged parts of the world’s second-largest economy, he says.

Singapore’s Straits Times Index gained 0.4 percent and India’s S&P BSE Sensex Index advanced 1 percent. Taiwan’s Taiex Index added 0.3 percent. New Zealand’s S&P/NZX 50 Index rose 0.8 percent.

Cnooc Ltd. and China Petroleum & Chemical Corp. jumped at least 4 percent in Hong Kong as energy led gains across the region. PetroChina Co. climbed 3.3 percent and Woodside Petroleum Ltd. advanced 1.1 percent in Sydney. West Texas Intermediate crude rose for a second day, adding 0.7 percent to $36.40 a barrel.

Futures on the S&P 500 slipped 0.1 percent after the underlying gauge added 0.9 percent Tuesday. The index has fallen 2 percent in December, historically a month when investors reap gains. After rebounding as much as 13 percent from its summer low through early November, the gauge has retreated, leaving it lower by 1 percent in 2015.

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