Asian Stocks Advance as Hong Kong Gauge Enters Bull Market

  • Singapore’s Straits Times Index set for highest since April
  • Indonesia’s benchmark stock index heads for May 2015 high

Asian stocks climbed toward a three-month high as phone companies gained and a measure of Hong Kong shares entered a bull market. Japanese equities retreated after a six-day rally.

The MSCI Asia Pacific Index rose 0.1 percent to 133.92 as of 4:40 p.m. in Hong Kong, erasing losses of as much as 0.4 percent. Global equities added more than $4.5 trillion in value in the past three weeks amid expectations policy makers will step up stimulus to stem the economic fallout arising from the U.K. shock decision to leave the European Union.

“Expectations for more stimulus has been supportive of equities,” Angus Nicholson, a strategist at IG Markets Ltd. in Melbourne, said by phone. “Asian markets have been resilient as they’ve been benefiting from capital inflows since the Brexit vote. Hong Kong has been one of the most unloved markets here so it’s catching up. It’s very cheap.”

The MSCI Hong Kong Index rose 1.1 percent at the close on Wednesday, capping gains since the January low to more than 20 percent and pushing the gauge into what traders define as a bull market. Hong Kong’s dual-listed stocks traded near the narrowest discount to their mainland Chinese counterparts since October as cheaper valuations in the city lured investors. The Hang Seng China Enterprises Index is valued at 7.4 times its projected 12-month earnings, 43 percent below that for the Shanghai Composite, according to data compiled by Bloomberg.

Singapore’s Straits Times Index advanced 0.7 percent, poised to close at a three-month high. The Jakarta Composite Index rose 1 percent toward its highest level since May 2015, while Thailand’s SET Index rallied for a sixth day, set for the highest close since June 2015. Indian shares climbed for a second day.

Australia’s S&P/ASX 200 Index gained 0.7 percent while New Zealand’s S&P/NZX 50 Index added 0.3 percent. South Korea’s Kospi index lost 0.1 percent. Taiwan’s Taiex index fell 0.3 percent after an eight-day advance that pushed the gauge to a bull market this month.

Japan’s Topix index retreated 0.1 percent, snapping its longest winning streak in nine months, as exporters and banks slumped while Nintendo Co. dropped the most in five years. The gauge rallied 8.9 percent last week, its best performance since 2009, as the yen dropped more than 4 percent. 

Equities have climbed after Prime Minister Shinzo Abe’s win in the upper-house elections raised optimism the government will act to spur growth. The IMF downplayed the need for Japan to weaken its currency to boost economic growth and inflation before a central bank policy meeting next week.

KDDI Corp. rose 2.3 percent in Tokyo, pacing gains among Japanese mobile carriers on speculation the phone companies will report their highest quarterly profit in at least a decade. Hyundai Development Co. climbed 5.2 percent in Seoul on expectations second quarter earnings will beat analyst estimates. Wilmar International Ltd. dropped 5.4 percent in Singapore after saying it lost $230 million in the second quarter amid challenging conditions in its grains and oilseeds and sugar businesses.

Futures on the S&P 500 Index gained 0.1 percent. The U.S. equity benchmark index slipped 0.1 percent on Tuesday, retreating from an all-time high. The recent record run for equities hit some headwinds as Netflix Inc. tumbled 13 percent after subscriber growth disappointed, and Philip Morris International Inc. dropped 3 percent after its earnings missed forecasts.

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