Asia Stocks Rally as Concerns of Rising Geopolitical Risk Ease

  • ‘Trump’s calibrated response is a reassurance’: BDO Unibank
  • Energy, technology shares pace regional gauge; Kakao surges

Markets Shrug Off North Korea Worries

Asian equities advanced as fears of escalating geopolitical risk eased following U.S. President Donald Trump’s tempered response to North Korea’s launch of a ballistic missile across Japan.

More than two stocks rose for each share that declined on the MSCI Asia Pacific Index, which gained less than 0.2 percent to 160.47 as of 4:31 p.m. in Hong Kong, following a 0.2 percent slide Tuesday. Trump said the U.S. will consider “all options” in response to North Korea’s missile launch Tuesday. Kim Jong Un said the missile was a "meaningful prelude" to containing the American territory of Guam, adding he will continue to watch the response of the U.S. before deciding on further action.

“Trump’s calibrated response is a reassurance for investors who are becoming accustomed to North Korea’s threat," said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “Given the dovish stance of the U.S. Fed and the absence of signals that economies are overheating in Asia, it’s still a positive environment for equities that a weakness should be taken as a buying opportunity."

Shares rebounded in Japan after the yen pulled back from a four-month high against the dollar. South Korea’s Kospi index continued its recovery from a drop of as much as 1.6 percent Tuesday.

Shimao Property Holdings Ltd. was the best performer on the regional benchmark, soaring as much as 17 percent in Hong Kong, its biggest gain since October 2008. The developer said Tuesday after trading closed that first-half net income increased 28 percent to 3.88 billion yuan ($589 million). The company raised its full-year 2017 contract sales target by 10 percent to 88 billion yuan, The Standard reported Wednesday.

A gauge of energy shares increased 1.1 percent as gasoline rose for a seventh session, while crude fell as traders braced for prolonged refinery and pipeline shutdown in the U.S. from Tropical Storm Harvey. A measure of technology stocks rose 0.6 percent, the biggest contributor to the MSCI Asia Pacific Index’s gain among the gauge’s 11 industry groups.

Kakao Corp. climbed as much as 5 percent in Seoul after a note from Yuanta Securities Korea highlighted that weekly visitors to the company’s mobile phone portal website, Daum, jumped 37 percent in the first quarter year-on-year. The stock ended the day up 2.5 percent, the highest close since Oct. 2015.

MSCI’s Asia-Pacific gauge has gained 19 percent so far this year and closed at its highest since 2007 on Aug. 2 amid strong corporate earnings and optimism U.S. interest-rate increases will remain gradual. The gauge has rallied 42 percent since Feb. 12, 2016 when it closed at its lowest in more than three years.

Summary

  • Japan’s Topix +0.6%, Nikkei 225 +0.7%
    • Japanese Shares Rise as Yen Falls on Easing North Korea Concern
    • Billionaire Shigeta’s Hikari Tsushin Gets Love From Market Again
    • Sumco Drops as BGC Says Switch to Tokuyama as Chip Capex Play
  • Hang Seng Index +1.2%, Hang Seng China Enterprises Index +0.7%
  • Kospi +0.3%, Kospi 200 Index +0.3%
  • Shanghai Composite Index little changed, Taiwan’s Taiex Index +0.7%
  • Australia’s S&P/ASX 200 Index little changed, New Zealand’s NZX 50 +0.5%
  • FTSE Bursa Malaysia KLCI Index +0.3%, Philippine Stock Exchange Index +0.1%, Jakarta Composite Index -0.2%, Singapore Straits Times Index +0.5%, Vietnam’s VN Index +0.6%, Thailand’s SET Index -0.1%
  • India’s Sensex +1%, Nifty 50 +1.1%
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