Asian stocks rose this week, leading a regional benchmark index to its biggest gain since last November, as Japan made progress stabilizing reactors at a nuclear plant crippled after the nation’s worst earthquake.
The MSCI Asia Pacific Index rose 4.06 percent to 134.27 this week, the most since the week ended Nov. 5 last year. The gauge last week recorded its biggest drop since the height of the European debt crisis in May last year, as Japan fought to avert a nuclear disaster and tensions escalated in Libya.
“The feared nuclear meltdown in Japan hasn’t happened and looks less and less like it will,” said Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors Ltd. “Investors are feeling less negative and so shares are having a bounce. It could prove temporary, though, if Middle East tensions lead to a further spike in the oil price.”
Japan’s Nikkei 225 Stock Average gained 3.6 percent in a holiday-shortened week, having plunged 10 percent last week on concern the earthquake, tsunami and damaged reactors would hurt a recovery in the world’s third-largest economy.
Taiwan’s TAIEX on Friday closed up 0.39 percent, from Thursday, at a two-week closing high, backed by net buying by three major institutional investors. The benchmark index closed 33.99 points higher to finish at 8,610.39, a 2.6 percent increase from last week.
Among the three major institutional investors, foreign and Chinese investors’ net buying of Taiwanese shares reached NT$12.056 billion (US$409.66 million), dealers bought NT$4 billion worth of issues and investment trust companies bought NT$4.38 billion worth of stocks.
Chu Yu-chih, a manager at Grand Cathay Investment Services Corp (大華證券), said the three major institutional investors’ net buying amid a global market rally indicates that concerns over the Japan disaster have eased.
South Korea’s KOSPI climbed 3.7 percent this week, while Australia’s S&P/ASX 200 Index rose 2.5 percent. Hong Kong’s Hang Seng Index advanced 3.9 percent.
The MSCI Asia Pacific Index has lost about 2.5 percent this year. Stocks in the Asian benchmark trade at about 13.5 times estimated earnings on average, compared with 14.8 times at the end of last year.
“The nuclear issue has calmed,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “People focused on low valuations will probably buy stocks.”
In other markets on Friday:
Manila closed 0.89 percent, or 34.27 points, up from Thursday at 3,875.81.
Wellington ended flat, edging up 1.36 points from Thursday to 3,388.61.
Mumbai jumped 2.53 percent, or 464.9 points, from Thursday to 18,815.64.
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