Asian stocks rose for the second week this month, as steelmakers led gains, after China refrained from raising interest rates and US data improved.
The MSCI Asia-Pacific Index climbed 0.4 percent to 133.59 this week. The gauge closed up on three days this week, and rose the most on Monday, after China refrained from raising interest rates to cool inflation, and US reports on consumer confidence, the trade deficit and claims for jobless benefits beat forecasts.
“Fears of an interest rate increase in China have not come to fruition so far,” said Tim Schroeders, who helps manage US$1 billion in Melbourne at Pengana Capital Ltd. “There’s a sense of relief in markets. This may be only temporary as Chinese authorities become increasingly concerned about the possibility of inflationary pressures undermining the economy’s longer-term growth prospects.”
In Japan, the Nikkei 225 Stock Average gained 0.9 percent, its seventh straight weekly advance and its longest winning streak since the eight-week period ended April 2. Australia’s S&P/ASX 200 climbed 0.4 percent, while South Korea’s KOSPI rose 2 percent.
Hong Kong’s Hang Seng Index declined 1.9 percent, while the Shanghai Composite Index rose 1.9 percent this week. India’s Sensitive Index rose 1.8 percent. The measure was closed on Friday for a holiday.
While China’s inflation accelerated to the fastest pace in 28 months last month, building the case for Chinese Premier Wen Jiabao (溫家寶) to raise interest rates, China instead ordered lenders on Dec. 10 to park more money with the central bank to counter the inflation threat.
“The government seems to be using reserve requirements at the moment as a more effective tool,” Hugh Simon, co-manager of the Dreyfus Greater China Fund, said in a Bloomberg Television interview.
“They need to have some relief about inflation. The market is not expensive,” Simon said.
The MSCI Asia-Pacific Index has risen 11 percent this year, with stocks on the gauge valued at 14.8 times estimated earnings on average, compared with 23 times at the start of the year.
China will strengthen controls in the real-estate market and curb speculative investment from next year through 2015, Xinhua reported on Thursday, citing China’s Ministry of Housing and Urban-Rural Development.
Taiwan’s TAIEX rose 35.70, or 0.4 percent, to 8,817.90 at the 1:30pm close of Taipei trading on Friday, marking its fifth day of gains. The benchmark advanced 1.1 percent this week, the fourth week of increases.
“A rise on Wall Street overnight further shored up investor confidence here,” Concord Securities Co (康和證券) analyst Allen Lin said, referring to a two-year overnight high recorded by US stocks.
“The local bourse, which has been awash in adequate funds, continued momentum largely on the back of foreign institutional investors,” Lin said.
However, the market is likely to encounter resistance ahead of 8,900 points over the next few sessions, Lin said.
In other markets on Friday:
Manila rose 0.44 percent, or 17.93 points, to 4,057.33 after sharp declines the previous two sessions.
Wellington rose 0.94 percent, or 31.34 points, to 3,325.11.
Mumbai was closed for a public holiday.