Asian Stocks Rise After Posting Biggest Daily Drop in Five Weeks

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  • Japan’s Topix index climbs for first time in four days
  • Bank of England expected to cut rates to record on Thursday

Global Markets: Where to Find Opportunity

Asian stocks rebounded after their worst decline in five weeks as Japanese shares climbed and material companies led regional gains.

The MSCI Asia Pacific Index rose 0.7 percent to 135.18 as of 4 p.m. in Hong Kong after falling 1.9 percent on Wednesday, the most since the day after Britain voted to leave the European Union. Commodity producers and consumer companies were the second- and third-biggest gainers as seven of 10 industry groups advanced. Brokerages and shippers helped push the Topix index up by 0.9 percent as it rebounded from a 2.2 percent drop caused by disappointment about the government’s stimulus program.

Asian equities have been retreating after their best month since March, as the yen gains and concern grows that Japanese Prime Minister Shinzo Abe’s economic program isn’t working. Oil descended into a bear market this week and disappointing economic data is testing confidence in a global recovery. U.S. jobs data Friday will provide further clues on when the Federal Reserve will increase interest rates, while the Bank of England will cut interest rates to a record on Thursday, according to almost all economists in a Bloomberg survey.

“The focus is going to be probably on two events, obviously the Bank of England monetary policy meeting coming up and also the non-farm payrolls,” said Chris Green, Auckland-based director of economics and strategy at First NZ Capital Group Ltd. Asian stocks “take a lead from the U.S.” and could have “more uncertainty with regards to likely Fed policy,” he said.

Regional Benchmarks

Japan’s Topix advanced for the first time in four days. Toyota Motor Corp., the nation’s largest company, cut its fiscal-year profit forecast after the trading close. The Bank of Japan probably doubled its exchange-traded fund purchases on Thursday, suggesting it’s opting to increase the daily amount rather than how often it buys, according to Tokai Tokyo Research Center.

The Philippines Stock Exchange Index led regional gains, climbing 1.1 percent, while the Jakarta Composite Index increased 0.5 percent. South Korea’s Kospi Index and Taiwan’s Taiex gauge added 0.3 percent, Australia’s S&P/ASX 200 Index was up 0.2 percent and New Zealand’s S&P/NZX 50 Index advanced 0.3 percent.

Hong Kong’s Hang Seng Index rose 0.4 percent, after slumping the most in five weeks on Wednesday as property builders declined, while Shanghai’s benchmark index gained for a third day, rising 0.1 percent. India’s S&P BSE Sensex fell for a fourth day, declining 0.1 percent.

Futures on the S&P 500 Index were little changed. The U.S. equity benchmark index rebounded 0.3 percent on Wednesday as energy shares rose with oil. While U.S. corporate earnings growth is improving, S&P companies are still set to post shrinking earnings for a fifth straight quarter.