Asia Stocks Rise, Headed for Weekly Gain, as Energy Shares Climb

  • Topix index posts first back-to-back weekly gain this year
  • Sharp falls another 11 percent after Foxconn deal in doubt

People's Bank of China Tweaks Monetary Stance

Asian stocks rose, with the benchmark measure set for a second weekly gain, as energy shares led the advance after oil steadied, while indexes from Japan to Hong Kong and China climbed.

The MSCI Asia Pacific Index rose 0.7 percent to 120.24 as of 5:04 p.m. in Tokyo, headed for a 0.5 percent increase this week. The measure has advanced 6.4 percent from a low on Feb. 12, rebounding after a 14 percent drop earlier in the year, as the focus shifts to a Group of 20 meeting that started Friday in Shanghai amid volatility in markets that’s unsettling investors.

“We may well see a lot of talk and little action,” said Niv Dagan, Melbourne-based executive director at Peak Asset Management LLC. “What we’d like to see is a coordinated approach from the G-20 to boost spending and produce some sense of certainty for markets. Investors remain cautious. We are not seeing too many companies increasing their profit guidance and investors are happy to sit on their hands.”

People’s Bank of China Governor Zhou Xiaochuan said he still has monetary policy tools at his disposal and there is no reason for yuan depreciation. U.S. Treasury Secretary Jacob Lew said earlier this week that an “emergency response” shouldn’t be expected from the group despite market gyrations.

Making his second public appearance in a week following months of silence as officials try to soothe anxiety over China’s currency, Zhou said China’s economy remains strong and its structure and quality is improving. The PBOC separately published a statement defining current policy as "prudent with a slight easing bias."

China Gains

The Shanghai Composite Index added 1 percent, paring this week’s drop to 3.3 percent. Hong Kong’s Hang Seng Index rose 2.5 percent and the Hang Seng China Enterprises Index of mainland firms listed in the city advanced 2.1 percent.

New home prices in China rose in more than half the cities the government monitors amid moves by authorities to loosen property curbs in regions. Japan’s core inflation was zero in January as low energy prices disrupt efforts to spur gains.

Japan’s Topix index rose 0.3 percent to cap its first back-to-back weekly gain since November. Sharp Corp. tumbled 11 percent after a deal with Foxconn Technology Group appeared at risk just hours after the Taiwanese firm won a vote to take control of the Japanese electronics maker. Foxconn said it won’t finalize a deal until the situation involving “new material information” is resolved. Friday’s drop added to Thursday’s 14 percent loss after the initial announcement of the deal.

Singapore’s Straits Times Index rose 1.8 percent and South Korea’s Kospi index gained 0.1 percent. Taiwan’s Taiex Index advanced 0.5 percent and the Jakarta Composite Index climbed 1.6 percent. New Zealand’s S&P/NZX 50 Index and Australia’s S&P/ASX 200 Index closed little changed.

No Turnaround

The MSCI Emerging Markets Index added 1 percent on Friday, trimming its decline over the past year to 25 percent. John-Paul Smith, one of few to anticipate the slump in developing markets that began in 2011, sees no sign of a turnaround and says the current environment resembles that of the late 1990s, when crises in Southeast Asia and Russia roiled the entire asset class.

Gains in Asia followed a 1.1 percent rise in the Standard & Poor’s 500 Index in New York Thursday. It closed at its highest since Jan. 6 and West Texas Intermediate crude rose 2.9 percent.

Futures on the S&P 500 added 0.4 percent. The underlying U.S. equities gauge rose to a seven-week high Thursday as banks and consumer-staples shares climbed amid optimism on the economy after data showed weakness in manufacturing may be easing. A report showed orders for U.S. capital goods rebounded in January by the most since June 2014. Orders for all durable goods rose 4.9 percent, the most since March.

The MSCI Asia Pacific gauge trades at 12.7 times estimated earnings, below its average for the past five years.

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