Asian Stocks Rise as Mixed U.S. Data Damp Rate Hike Outlook

  • Japan’s Topix index reverses losses amid yen weakness
  • N.Z.’s benchmark index tumbles 1.3 percent to three-month low

What a Possible Dec. Fed Rate Hike Means for Markets

Asian stocks headed for the biggest advance in almost a month, led by commodity shares, as mixed U.S. economic data spurred optimism that the U.S. will keep monetary policy accommodative.

The MSCI Asia Pacific Index rose 0.9 percent to 139.37 as of 4:10 p.m. in Hong Kong. Philippine equities paced gains, while Hong Kong shares rose the most in six weeks. Japan’s Topix index finished 0.3 percent higher, erasing an earlier loss, as the yen hovered around 104 versus the dollar. Investors are dissecting economic data and rhetoric from policy makers to weigh the outlook for when the Federal Reserve will raise borrowing costs and as they brace for the third U.S. presidential debate on Wednesday.

“We’re likely to see some choppy trading until we get some of these risk events out of the way, such as the last U.S. presidential debate,” James Woods, an analyst at Rivkin Securities in Sydney, said by phone. “Momentum seems to be building up for a December rate hike by the Fed.”

Fed Vice Chairman Stanley Fischer Monday said that he sees limits to how far the central bank can pursue a strategy aimed at continuing to reduce unemployment. Fischer didn’t comment directly on when he thought the Fed should next raise interest rates, though he said the central bank was “very close” to meeting its statutory goals of creating full employment with stable prices. Investors are also closely watching earnings out of the world’s biggest economy.

Casinos Rebound

Hong Kong stocks climbed, led by financial companies and casino operators. The Hang Seng Index gained 1.6 percent, after touching its lowest level since Sept. 1 on Monday. The Shanghai Composite Index rose 1.4 percent, while the Shanghai B-share index jumped 2.6 percent after plunging the most in nine months in the previous session.

A measure of Macau’s gambling companies bounced back after sliding the most since August in the previous session as Chinese authorities detained employees from billionaire James Packer’s Crown Resorts Ltd. MGM China Holdings Ltd. added 3.4 percent, while Galaxy Entertainment Group Ltd. and Wynn Macau Ltd. rose at least 2.7 percent.

China GDP

The next focal point for the markets will be Chinese economic data on industrial production, retail sales and gross domestic product that are all due on Wednesday after a report last week showed the nation’s exports unexpectedly dropped in September. GDP probably expanded 6.7 percent from a year earlier in the three months through September, the same pace as the previous two quarters and smack in the middle of the government’s full-year target pace, according to a Bloomberg survey of economists. Industrial output, fixed-asset investment and retail sales all likely picked up last month, surveys show.

The Philippine Stock Exchange Index surged 2.9 percent, the most since May. President Rodrigo Duterte starts a four-day trip to China on Tuesday, and there’s optimism it will yield investment deals and boost tourism, said James Lago, head of research at PCCI Securities Brokers Corp. in Manila.

South Korea’s Kospi index advanced 0.6 percent, Australia’s S&P/ASX 200 Index closed up 0.4 percent and Taiwan’s Taiex index climbed 0.5 percent. Equity benchmark gauges in Singapore, Malaysia and Indonesia added at least 0.4 percent.

New Zealand Tumbles

New Zealand’s S&P/NZX 50 Index tumbled 1.3 percent to the lowest since July 5, extending declines since reaching a record last month as investors dumped winners from earlier in the year. The losses were led by companies with high-dividend yields, including Meridian Energy Ltd.

“There are an unusual mix of local investors taking profits and a bit of foreign selling as well,” Grant Williamson, an investment adviser at Hamilton Hindin Greene, a brokerage in Christchurch, New Zealand, said by phone. “I’m still viewing this as a pretty healthy correction after some pretty strong gains where we have outperformed most world markets for some time.”

Futures on the S&P 500 Index rose 0.5 percent. The U.S. equity benchmark index dropped 0.3 percent on Monday. The Federal Reserve Bank of New York said its Empire State index declined this month as analysts projected an expansion, while data on U.S. manufacturers signaled a recovery.

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