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Thursday, 11 July 2013
Asian Stocks Extend U.S. Jump on Stimulus as Copper Gains
By Glenys Sim & Adam Haigh - Jul 12, 2013 7:49 AM GMT+0400
Asian stocks rose, with the regional benchmark headed for its biggest weekly gain since April, on optimism policy makers from the U.S. to Japan will maintain stimulus. Metals led commodities lower, while the won climbed.
The MSCI Asia Pacific Index added 0.2 percent to 135.39 at 12:31 p.m. in Tokyo. Standard & Poor’s 500 Index (SPA) futures lost 0.2 percent after the gauge jumped to a record yesterday. The S&P GSCI Index of 24 raw materials failed to rally from yesterday’s 0.3 percent decline as silver, aluminum and corn retreated. The won rose 0.2 percent to 1,120.05 per dollar, and corporate credit risk in Asia declined.
Visitors look at an electronic board displaying stock figures at the Tokyo Stock Exchange in Tokyo. Photographer: Junko Kimura/Bloomberg
July 12 (Bloomberg) -- Peter Tchir, founder of hedge-fund adviser TF Market Advisors, talks about U.S. and emerging-market stocks and bonds. Tchir also discusses the outlook for China's economy and Federal Reserve monetary policy. He speaks from New York with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
July 10 (Bloomberg) -- Mikio Kumada, a Hong Kong-based global strategist for LGT Capital Partners, talks about China and Japan's economies and stock markets. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)
July 10 (Bloomberg) -- Bhaskar Laxminarayan, chief investment officer for Asia at Pictet & Cie, Switzerland’s biggest closely held private bank, talks about the outlook for global stock markets and his investment strategy. He speaks in Hong Kong with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
The U.S. Federal Reserve and the Bank of Japan both indicated this week they will maintain monetary stimulus, after the European Central Bank and Bank of England signaled they will keep key rates low. Central banks around the world helped stoke a 13 percent advance in global equities last year by cutting interest rates, injecting liquidity and buying assets.
“Monetary conditions are still very stimulatory and markets can get some comfort from that,” Chris Green, an Auckland-based strategist at First NZ Capital Ltd., a brokerage and wealth management firm, said by phone. “Even though there is a recognition that tapering is on the way, the market has got more confidence that it’s not touching the brakes, just easing off the accelerator. That will be supportive for equities for some time.”
The S&P 500 rose for a sixth day yesterday, its longest rally since March. Fed Chairman Ben S. Bernanke said July 10 that “highly accommodative monetary policy for the foreseeable future is what’s needed.” The measure has recouped all of a 5.8 percent slide from May 22 to June 24 triggered after Bernanke told Congress the Fed could taper bond purchases should the economy continue to improve.
About five stocks rose for every three that fell on the MSCI’s Asian gauge, which has risen 3.1 percent this week. The MSCIEmerging Markets Index added 0.1 percent after jumping the most in almost 10 months yesterday.
Hong Kong’s Hang Seng Index slid 0.5 percent, trimming its a third weekly advance after gaining the most since January yesterday. The Shanghai Composite Index retreated 0.5 percent after yesterday capping its biggest two-day gain in 18 months. Shares in South Korea (KOSPI) and Singapore also declined.
China’s Finance Minister Lou Jiwei, speaking yesterday at the U.S.-China Strategic and Economic Dialogue in Washington, said a 6.5 percent economic-growth rate wouldn’t be a “big problem.”
Lou also said he’s confident in achieving a 7 percent growth rate this year. That’s lower than the government’s 2013 target of 7.5 percent, given in March. Data due July 15 may show economic growth slowed for a second quarter in the three months to March 31.
Australia’s S&P/ASX 200 Index added 0.6 percent, putting the measure on track for a 3.2 percent weekly advance, the most since the end of April. Japan’s Topix index rose 0.5 percent. The gauge is up 1.1 percent in the past five days, gaining for a fourth such period in the longest weekly rally since March.
The cost of insuring corporate and sovereign bonds against non-payment in Asia outside Japanfell, according to credit-default swap traders. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 3 basis points to 146 basis points, Royal Bank of Scotland Group Plc prices show. The measure is poised to close at its lowest level since June 19, according to data provider CMA.
Silver for immediate delivery dropped as much as 1.1 percent to $19.9516 an ounce. The metal has rallied 5.6 percent this week, heading for the biggest weekly increase since September 2012. Aluminum decreased 0.7 percent to $1,822.50 a metric ton, while copper, lead and nickel all retreated at least 0.4 percent on the London Metal Exchange.
Corn led agricultural commodities lower after the U.S. said yesterday record domestic harvests in 2013 will more than double inventories. Prices declined 0.6 percent to $5.24 a bushel. Wheat lost 0.1 percent.
South Korea’s won rose 2 percent this week, set for its biggest weekly gain since December 2011. The Bank of Korea kept its benchmark interest rate unchanged at 2.5 percent yesterday and boosted its 2013 gross domestic product growth projection to 2.8 percent from an April estimate of 2.6 percent.