Asian Stocks Head for Best Week in Month as Energy Shares Rally

  • Japan’s Topix index rises as trading resumes after holiday
  • Regional benchmark equity gauge heads for weekly advance

Asian stocks headed for the largest weekly gain in a month, following U.S. equities higher, as a rebound in crude oil buoyed energy producers and Hong Kong shares extended a world-beating rally.

The MSCI Asia Pacific Index rose 0.1 percent to 139.17 as of 4:10 p.m. in Hong Kong, near a one-year high and taking gains this week to 2.5 percent. Japan’s Topix index capped its best week in a month and foreign buying sent Indian shares toward the longest stretch of weekly advances since March. Hong Kong equities reached the highest level since November after earnings topped estimates and investors shrugged off disappointing Chinese economic data.

“As long as U.S. shares continue to rally, equity markets will remain stable,” Michael McCarthy, chief market strategist in Sydney at CMC Markets, said by phone. “The rally looks sustainable. What we’re looking at is a climb into the wall of worry into the year-end, with elevated risks given these abnormal monetary conditions.”

After a choppy start to the year, the Asian benchmark gauge climbed 23 percent from a February low through Thursday, shrugging off the effects of Britain’s vote to leave the European Union as central banks unleash further monetary easing while data spurs confidence in the world’s largest economy. Wagers on the Federal Reserve hiking borrowing costs this year linger below 50 percent.

The S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index all closed at all-time highs Thursday for the first time in 16 years as retailers Macy’s Inc. and Kohl’s Corp. posted earnings that beat analyst estimates. Oil headed for its steepest weekly advance since April amid speculation informal OPEC talks next month may lead to stabilization measures after prices tumbled into a bear market.

The Topix advanced 0.6 percent on Friday as Japan shares resumed trading after Thursday’s holiday. The measure rose 3.4 percent this week as the yen held losses. India’s S&P BSE Sensex headed for a third weekly increase as foreign funds have been net buyers for 24 days in a row, the longest stretch since Prime Minister Narendra Modi came to power in May 2014.

Beating Estimates

The Hang Seng Index rose 0.8 percent as CK Hutchison Holdings Ltd. climbed after earnings beat estimates. The measure has surged 14 percent in the past three months, the most among major global benchmark gauges, amid an improving interest-rate outlook and signs of stability in the city’s property market.

The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong surged 1.4 percent, extending gains for a seventh day. The Shanghai Composite Index jumped 1.6 percent as stake purchases by China Evergrande Group fueled optimism that the pace of merger activity in the property industry will accelerate.

China’s recent economic stabilization faltered in July as factory output, retail sales and investment all slowed, missing economists estimates. Industrial production rose 6 percent from a year earlier in July, the National Bureau of Statistics said Friday. Retail sales climbed 10.2 percent last month, while fixed-asset investment increased 8.1 percent in the first seven months of the year.

“Though the economic data are weak, they are still within an acceptable range to investors,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co. “The rally in the Hong Kong has fundamental support as earnings from its flagship companies are pretty strong.”

Energy Shares

Taiwan’s Taiex index added 0.2 percent, Australia’s S&P/ASX 200 Index gained 0.4 percent and New Zealand’s S&P/NZX 50 Index rose 0.1 percent. South Korea’s Kospi index increased 0.1 percent and Singapore’s Straits Times Index fell 0.1 percent. Vietnam’s VN Index slid 0.7 percent, paring gains this week to 4.5 percent, the most since October.

Cnooc Ltd.. advanced 3.2 percent in Hong Kong, pacing gains among energy shares, as crude oil rose to almost $44 a barrel. Nippon Paint Holdings Co. jumped 7.3 percent in Tokyo after reporting quarterly earnings improved. International Container Terminal Services Inc. surged 10 percent in Manila, taking a three-day rally to 22 percent, the most since 2009, as Morgan Stanley and HSBC Holdings Plc upgraded the stock.

Noble Group Ltd. slumped 3.9 percent in Singapore after the commodities trader posted a quarterly loss and net debt increased as the company sought to raise cash.

Futures on the S&P 500 Index were little changed. The U.S. equity benchmark index gained 0.5 percent on Thursday, extending this year’s advance to 6.9 percent. The Dow Average and Nasdaq added more than 0.4 percent.

— With assistance by Shidong Zhang

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