Asian Stocks Pare Worst Month Since February as Samsung Rallies

  • Singapore shares head for longest rally in almost two years
  • Samsung provides biggest boost to Asian equities gauge

Are Markets Underestimating a Potential Trade War?

Asian stocks trimmed their biggest monthly rout since February as technology companies rallied and shares in Tokyo closed near their highest level in almost a year.

The MSCI Asia Pacific Index climbed 0.2 percent to 136.50 as of 4:33 p.m. in Hong Kong, paring a 1.8 percent drop this month. Samsung Electronics Co.’s surge to a record Wednesday provided the biggest boost to the regional gauge. Thirty-day historical volatility on the MSCI Asian measure hovered at an August high before OPEC’s decision on an oil supply-curb deal. Investors are also waiting for a monthly U.S. payrolls report Friday and an Italian referendum on constitutional reform this weekend. Japanese shares capped their best month since July, as the yen continued to weaken amid prospects for growth in the U.S. economy.

Investors have pared back some of November’s standout trades after global stocks posted their best month since July, as U.S. President-elect Donald Trump’s win fueled bets on spending and interest-rate hikes. A report Tuesday showed the U.S. economy expanded more than previously reported last quarter, rising at a 3.2 percent annualized rate, the fastest in two years.

“The market in generally is just going sideways as investors are awaiting many key events including the OPEC meeting and U.S. job data,”  said Andrew Sullivan, managing director for sales trading at Haitong International Securities Group Ltd. in Hong Kong. “In the short term, people are still looking at U.S. President-elect Donald Trump’s team to try to work out what it means for the economy going forward.”

Oil rallied from a two-week low as Iran’s oil minister said he has “good expectations” for Wednesday’s OPEC meeting, an optimistic note contrasting with the discord leading up to the group’s decision on a deal to curb output.

Samsung rose 4.1 percent in Seoul after South Korea’s most valuable company said it’s looking at a plan to turn itself into a holding company. The benchmark Kospi index rose 0.3 percent after President Park Geun-hye said she’s willing to resign following an influence-peddling scandal that’s shaken Asia’s fourth-biggest economy. Australia’s S&P/ASX 200 Index slipped 0.3 percent and New Zealand’s S&P/NZX 50 Index added 0.1 percent.

Japan’s Topix index gained 0.1 percent, taking its advance for November to 5.5 percent. The stock measure has risen for 13 of the last 14 sessions, and is hovering around its highest level since January when the Bank of Japan introduced negative interest rates. The nation’s stocks have been on a tear since Trump’s election win on Nov. 8 sparked a global rally in the dollar and equities, propelling both the Topix and the Nikkei 225 Stock Average into a bull market as the yen weakened.

Hong Kong’s Hang Seng Index added 0.2 percent, while the Hang Seng China Enterprises Index of mainland shares traded in Hong Kong lost 0.1 percent. The Shanghai Composite Index fell 1 percent as a technical indicator suggested the mainland market is overheating.

Elsewhere, Singapore’s Straits Times Index advanced 0.7 percent, its seventh day of gains, poised for the longest winning streak since an eight-day rally through December 2014. The measure seems to be belatedly catching up with a post election rally following Japan and the U.S., said Margaret Yang, a CMC Markets analyst in Singapore. 

Vietnam’s VN Index climbed 1 percent, while equity gauges in Indonesia, Taiwan and India rose at least 0.5 percent. E-mini futures on the S&P 500 added 0.1 percent after the underlying index climbed 0.1 percent on Tuesday.

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