Asian Stocks Rise After China Inflation Data, Thai Shares Jump

  • Thai gauge surges as much as 4.3%, paring weekly decline
  • China consumer and producer prices top economists’ forecasts

China PPI Data: Sign of Stabilization?

Asian stocks snapped a five-day drop after Chinese inflation beat expectations, boosting optimism about the strength of the world’s second-largest economy. Equities in Thailand surged on prospects for a smooth transition following the death of King Bhumibol Adulyadej.

The MSCI Asia Pacific Index rose 0.2 percent to 138.2 as of 4:03 p.m. in Hong Kong, paring its decline this week to 1.7 percent. Japan’s Topix Index closed up 0.4 percent and Hong Kong’s Hang Seng Index advanced 1 percent. Thailand’s SET Index jumped 4.1 percent, the most since 2013, as the government signaled the 88-year-old king’s only son will take the throne.

China’s producer prices in September rose for the first time since 2012, surprising economists who had forecast a decline, while consumer prices also gained more than estimated. That gave a boost to stocks that had been in retreat on the prospect of a U.S. interest-rate increase this year. Federal Reserve Chair Janet Yellen is due to speak at the Boston Fed Conference later on Friday.

“The turn up in China PPI is indicative of receding deflation risks globally,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $121 billion. “It’s another sign that global deflation is fading. Today’s data was certainly a lot stronger than I thought it would be.”

China’s producer-price index rose 0.1 percent in September from a year earlier, the National Bureau of Statistics said Friday, compared with a 0.3 percent drop estimated by economists in a Bloomberg survey. The consumer-price index rose 1.9 percent, while analysts had forecast a 1.6 percent increase. The Shanghai Composite Index rose 0.1 percent.

Years of deflation for China’s factories has abated as global commodity prices recover and domestic demand stabilizes on the back of past stimulus. Still, with external demand tepid, the currency has slipped to a six-year low as growth clouds remain.

Thailand’s SET Index rose 4.2 percent, extending a gain on Thursday when the gauge closed higher before the king’s death was announced. Thai assets had tumbled earlier in the week after the royal palace said Sunday that King Bhumibol’s health was “unstable.” Crown Prince Maha Vajiralongkorn has been anointed Thailand’s next monarch following his father’s death.

“I don’t think there is going to be too many dramatic changes to policy,” Sean Darby, chief global equity strategist at Jefferies Group LLC, told Bloomberg TV in Hong Kong. “The backdrop for the country is very good. Any short-term outflows will be easily managed by the authorities.”

U.S. Volatility

Australia’s S&P/ASX 200 Index closed little changed and New Zealand’s S&P/NZX 50 Index climbed 0.2 percent. South Korea’s Kospi index added 0.4 percent, Singapore’s Straits Times Index rose 0.2 percent, while Taiwan’s Taiex Index fell 0.6 percent. The Philippine Stock Exchange Index increased 1.1 percent and the Jakarta Composite Index was up 1 percent.

Futures on the S&P 500 Index rose 0.1 percent. The underlying measure lost 0.3 percent on Thursday in a volatile session amid fresh concern that tepid global growth will weigh on the American economy. The CBOE Volatility Index, a gauge of U.S. stock options prices, climbed to the highest level in a month.

Equity investors will be watching earnings reports on Friday from JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. for clues on the health of the world’s largest banks as the U.S. reporting season ramps up.

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