Asian Stocks Head for Nine-Month High as Hong Kong Shares Rally

Updated on
  • Hong Kong’s Hang Seng Index climbs to seven month high
  • Japan’s Topix fell by most in two weeks as yen strengthens

Where Are Global Stocks Headed in the Second Half?

Asian stocks rose toward the highest level since October as telecommunications firms surged and gambling companies drove a rally in Hong Kong shares. Tokyo equities slid on a stronger Japanese yen as investors weighed the outlook for stimulus.

The MSCI Asia Pacific Index climbed 0.5 percent to 134.78 as of 4:11 p.m. in Hong Kong, reversing earlier losses. A turnaround in revenue propelled Sands China Ltd. to the steepest gain since March, helping Hong Kong’s Hang Seng Index close at a December high. Japan’s Topix sank 1.4 percent as the yen extended its advance after Finance Minister Taro Aso said the government has yet to decide on the size of a fiscal spending package and that monetary policy decisions are in the Bank of Japan’s hands.

“Hong Kong is leading the rally because of the good earnings from the gambling sector,” Margaret Yang, an analyst at CMC Markets in Singapore, said by phone. “Sentiment remains very cautious ahead of the central bank meetings.”

Global equities have fluctuated before this week’s central bank policy meetings. The Bank of Japan is widely expected to add to stimulus at the end of a two-day meeting on July 29, with 32 of the 41 analysts surveyed by Bloomberg predicting policy makers will expand their record program. While the Fed is most likely to leave interest rates unchanged on Wednesday, futures traders are predicting a 48 percent chance borrowing costs will rise in December.

China’s Shanghai Composite Index rose 1.1 percent. South Korea’s Kospi index gained 0.8 percent to the highest level since Nov. 27. Taiwan’s Taiex added 0.4 percent, Singapore’s Straits Times Index slid 0.3 percent and Australia’s S&P/ASX 200 Index increased 0.1 percent. New Zealand’s S&P/NZX 50 Index retreated from a record high.

Japan’s Topix dropped for a third straight day, as the yen traded at 104.16 against the dollar. The government is planning a fiscal stimulus package that includes 6 trillion yen in spending, double the original estimate, the Nikkei newspaper reported.

“The market expectation for the BOJ to move is very high,” Angus Nicholson, a strategist at IG Markets Ltd. in Melbourne, said on Bloomberg Radio. “There’s a real risk we would see a sharp retracement if they disappoint.”

Luye Pharma Group Ltd. jumped 8.2 percent in Hong Kong after the Chinese drugmaker agreed to buy Switzerland-based Acino Holding AG for 245 million euros. SoftBank Group Corp. rose 3 percent in Tokyo after unit Sprint Corp. reported its sixth straight quarter of subscriber gains, a sign that the the turnaround of the money-losing U.S. wireless carrier is starting to work.

Futures on the S&P 500 Index slipped 0.1 percent. The U.S. equity benchmark index fell 0.3 percent, retreating from an all-time high, as a tumble in the price of crude sank energy shares.

West Texas Intermediate crude futures slid in Asian trading after slumping 2.4 percent on Monday. Oil traded near a 3-month closing low before the release of U.S. fuel stockpile data that’s expected to show an increase in refined-fuel stockpiles.