Asia Stocks Rise for 3rd Day Before Yellen Testimony, U.K. Voteby
Japan’s Topix advances as yen breaks seven-day string of gains
Fed’s Yellen testifies in semiannual report Tuesday, Wednesday
Asian stocks rose, poised for the biggest three-day rally in two months, as the yen retreated before testimony by Federal Reserve Chair Janet Yellen and investors watched polls for the looming British referendum.
The MSCI Asia Pacific Index advanced 0.8 percent to 129.83 as of 4:06 p.m. in Hong Kong, after jumping 1.9 percent on Monday amid bets the U.K. will opt to stay in the European Union in Thursday’s vote. Britain’s plebiscite remains too close to call, with a YouGov poll for the Times newspaper published late on Monday showing “Leave” at 44 percent and 42 percent for “Remain,” while a survey by ORB for the Daily Telegraph had “Remain” at 53 percent and “Leave” at 46 percent. Philippine and Japanese shares led gains in the region.
Gains in Asia came on the back of a 3.7 percent surge in a measure of European stocks on Monday, more in one day than it has risen in any full week since February, while the pound surged the most since 2008 and global equities posted their biggest rally in three months. Bookmaker figures processed by the Oddschecker survey found that the probability of a vote to leave the EU had fallen since the murder of a pro-European lawmaker last week.
“People are starting to take risks again,” said Karl Goody, a private wealth manager at Shaw and Partners Ltd. in Sydney, which oversees about A$10 billion ($7.5 billion). “We saw a bit of an overreaction and you often need that to get people back into the market. It had got a bit overdone.”
Billionaire investor George Soros said the pound may slump more than 20 percent against the dollar if British voters decided to leave, a devaluation bigger and more disruptive than when he profited by betting against the currency in 1992.
“Brexit would make some people very rich, but most voters considerably poorer,” Soros wrote in an op-ed published in the U.K.’s Guardian newspaper on Tuesday.
In the U.S., Yellen is scheduled to testify on monetary policy before lawmakers on Tuesday and Wednesday in a semiannual report, which will also serve as a cue for investors. Traders have cut back their bets on higher borrowing costs, pricing in less than even odds for an increase as late as February 2017.
Japan’s Topix index climbed 1.2 percent, following a 2.3 percent rally on Monday. The gauge is up 4.2 percent for the past three days, the most since April. The yen slipped 0.6 percent to 104.55 to the dollar, breaking a string of seven straight days of gains.
Australia’s S&P/ASX 200 Index rose 0.3 percent, pulled higher by gains among technology and bank stocks. New Zealand’s S&P/NZX 50 Index fell 0.4 percent.
South Korea’s Kospi index added 0.1 percent, its third day of increases. Singapore’s Straits Times slipped 0.1 percent. Hong Kong’s Hang Seng Index climbed 0.8 percent, while the Shanghai Composite Index retreated 0.4 percent to halt a two-day gain.
Shanghai Jinqiao Export Processing Zone Development Co. surged by the daily limit. Its base has emerged as the front-runner to become the production site for Tesla Motors Inc. in China in an investment that may be valued at about $9 billion, according to a person with knowledge of the matter.
Philippine equities jumped 1.3 percent to the highest level since May 2015, rallying for a fifth day. Stock indexes in Taiwan and Thailand advanced 0.7 percent. India’s S&P BSE Sensex fell 0.3 percent, after two days of gains. The gauge had rebounded from its morning lows on Monday as measures announced by the government to lure overseas investment bolstered sentiment dented by the central bank Governor Raghuram Rajan’s impending departure.
E-mini futures on the S&P 500 Index climbed 0.5 percent after the underlying gauge rose 0.6 percent on Monday.