Asian Stocks Climb to 11-Week High as Japan Rallies on Stimulus

  • Topix posts biggest two-day gain since February as yen tumbles
  • Sensex extends bull market amid earnings recovery, inflows

Japanese Yen Sees Biggest 2-Day Decline Since Nov. 2014

Asian stocks climbed for a second day, with the regional benchmark index heading for its highest close in 11 weeks, as a tumbling yen pushed Japanese equities higher and Indian shares extended a bull market.

The MSCI Asia Pacific Index rose 1.4 percent to 132.47 as of 4 p.m. in Hong Kong, heading for its highest close since April 25. Japan’s Topix index advanced 2.4 percent, extending its two-day rally to 6.3 percent, the most in four months. The nation’s exporters from Canon Inc. to Toyota Motor Corp. rallied after the yen fell by the most since October 2014 as Prime Minister Shinzo Abe said he planned to add fiscal stimulus following the ruling coalition’s upper-house election victory.

Shares across the world are rising on speculation policy makers will act to stem any fallout from the U.K. decision to leave the European Union, with the Bank of England tipped to cut rates this week. While the probability of a Federal Reserve interest-rate increase by December has risen to around 29 percent following a stronger-than-expected U.S. jobs report, it’s still less than the 44 percent chance the day before the Brexit vote.

“The probability of a Fed rate hike this year remains surprisingly low even with the stronger jobs data,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “Accommodative monetary policies are supportive of share markets in the short term.”

India Bulls

The S&P BSE Sensex index added 0.3 percent, extending a bull market that it entered on Monday. It’s now up 21 percent from a low reached in February. A revival in corporate profitability and global risk appetite has prompted overseas funds to snap up the nation’s stocks at the fastest pace in a year. Foreigners invested $771 million in June, the fourth month of net purchases, data compiled by Bloomberg show.

Thailand’s SET Index was also on the cusp of entering a bull market, edging up 0.1 percent to take its gain from a January low to 20 percent. South Korea’s Kospi index added 0.1 percent, Australia’s S&P/ASX 200 Index rose 0.3 percent and New Zealand’s S&P/NZX 50 Index gained 0.2 percent. Taiwan’s Taiex index climbed 0.6 percent, Hong Kong’s Hang Seng Index advanced 1.7 percent and Singapore’s Straits Times Index increased 0.7 percent.

China’s Shanghai Composite Index jumped 1.8 percent to its highest close in almost three months. The nation’s pension funds, which have about 2 trillion yuan ($299 billion) available for investment, may start to deploy some of their holdings in securities including equities in the second half, according to China International Capital Corp. and CIMB Securities Ltd.

Casino Rally

Wynn Macau Ltd. and Galaxy Entertainment Group Ltd. climbed at least 4.4 percent in Hong Kong as brokerage Telsey Advisory Group said Macau gaming revenues were likely to halt two years of declines in July. China Coal Energy Co. jumped 7.4 percent after saying it will swing to a first-half profit from a net loss a year earlier. Nintendo Co. surged 13 percent in Tokyo, taking its advance since July 7 to 59 percent, after its Pokemon Go mobile game became an instant hit.

Futures on the S&P 500 rose 0.3 percent. The U.S. equity benchmark index added 0.3 percent on Monday, extending a rally from Friday when the jobs report brightened the economic outlook.

Investors now turn their focus to earnings after Alcoa Inc. unofficially kicked off the U.S. reporting season after the markets closed Monday. The 128-year-old aluminum producer released earnings that exceeded analysts’ estimates after profit from its car and jet parts businesses offset declines in prices for the metal.

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