By Glenys Sim and Rishaad Salamat - Aug 23, 2012 8:19 AM GMT+0400
Asian stocks gained and gold climbed to a 16-week high on speculation central banks in the U.S. and China will ease monetary policy to support growth. Soybeans rallied to a record and emerging-market currencies rose.
The MSCI Asia Pacific Index (SPX) advanced 0.8 percent at 1:09 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index gained 0.3 percent and contracts on the FTSE 100 Index rose 0.6 percent. Gold for immediate delivery climbed for a seventh day, up as much as 0.6 percent to $1,665.30 an ounce, the most since May 2. Soybeans touched an all-time high of $17.4475 a bushel. South Korea’s won and Malaysia’s ringgit climbed the most in more than two weeks.
Minutes of the U.S. Federal Reserve’s last meeting showed many members favored more stimulus unless the pace of the economic recovery picks up. Photographer: Sergio Dionisio/Bloomberg
Minutes of the U.S. Federal Reserve’s last meeting showed many members favored more stimulus unless the pace of the economic recovery picks up. People’s Bank of China GovernorZhou Xiaochuan said adjustments to interest rates and banks’ reserve requirements are still possible after the central bank stepped up temporary cash injections this month. A preliminary report today showed China’s manufacturing may contract at a faster pace in August.
“This is the most explicit statement around quantitative easing we’ve seen from the Fed, and should be very good for markets,” Warren Hogan, chief economist at Australia & New Zealand Banking Group Ltd., said in a Bloomberg Television interview. “Markets are more and more resilient to European news and there’s a clear commitment to keep this thing working.China’s economy is softer than where the government would like it to be and we want to see some good numbers soon.”
Gold Advances
About five stocks rose for every three that fell on the MSCI Asia Pacific Index, which headed for its highest close since May 4. Korea Zinc Co. climbed 4.1 percent in Seoul after a rally in gold and silver, which account for almost half of its sales. Qantas Airways Ltd. (QAN) rose 3 percent in Sydney as the airline canceled an order for 35 Dreamliner jets after posting its first annual loss in at least 17 years, easing concern about funding requirements.
The dollar fell against most of its major peers. It was at $1.2549 per euro after earlier touching $1.2553, the weakest since July 4. Demand for Europe’s shared currency was tempered before data that may show further contraction in the region’s manufacturing and services industries.
China’s Manufacturing
The preliminary reading for a purchasing managers’ index for China released today by HSBC Holdings Plc and Markit Economics was 47.8 after July’s final 49.3 figure. If confirmed, it would be the weakest level since November. It would also mark the 10th month the gauge was below 50, representing a contraction, the longest run of such readings in the index’s eight-year history.
China’s yuan traded near a seven-week high on speculation stimulus at home and in the U.S. will support capital inflows and exports. China’s central bank conducted 145 billion yuan ($22.8 billion) of reverse-repurchase agreements today to add cash to the financial system, after injecting a record 220 billion yuan on Aug. 21.
Gold’s seven-day advance is the longest such streak since June. Assets in gold-backed exchange-traded products reached 2,442.263 metric tons yesterday, data compiled by Bloomberg show, and are now the world’s fourth-largest hoard when compared with national reserves. Silver added 1.3 percent.
Platinum gained for a sixth day in its longest advance since October. Contracts for immediate delivery rose as much as 1.6 percent to $1,560.50 an ounce, the highest level since May 3, as violence at mines in South Africa, the world’s top producer, disrupted production.
Soybeans for November delivery rose 0.5 percent to $17.36 a bushel, while December-delivery corn added 0.3 percent to $8.37 a bushel after touching a record $8.49 on Aug. 10. The worst U.S. drought in half a century curbed crop supplies, driving the S&P GSCI gauge of 24 raw materials up for a fourth day to the highest level since May.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net;
Rishaad Salamat in Hong Kong at rishaad@bloomberg.net
To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net
