Asian stocks gained for a third week as takeovers and the improving US economy bolstered optimism that the global recovery can be sustained. Stocks also rose as Japan pledged support for businesses hit by the March 11 earthquake and made progress stabilizing a nuclear power plant.
“We’re seeing more positive data coming out of the US,” said Daphne Roth, head of Asian equity research at ABN Amro Private Banking, which oversees about US$14 billion in the region. “Merger-and-acquisition activities are a positive sign, underscoring the companies’ need to expand and grow their businesses.”
The MSCI Asia Pacific Index climbed 0.9 percent to 136.54 as of this week, driving the regional benchmark index to its highest level since last month’s earthquake. The gauge has risen for the past three weeks as the US unemployment rate dropped to a two-year low and companies from Hitachi Ltd and Toyota Motor Corp said factories in Japan that were shut after the nation’s strongest earthquake on record will reopen this month.
The TAIEX closed marginally lower on Friday after rallying for six consecutive sessions, due mainly to weak performance of electronics and petrochemical shares, dealers said.
The weighted index lost 0.08 percent from Thursday to close at 8,894.54, a 2.2 percent gain from a week before.
The index’s modest loss marked an end to a six-day rally that began on March 29. The market was closed on Monday and Tuesday for Children’s Day and Tomb Sweeping Day celebrations.
Hong Kong’s Hang Seng Index climbed 2.5 percent this week, while China’s Shanghai Composite Index increased 2.1 percent. South Korea’s KOSPI increased 0.3 percent. Australia’s S&P/ASX 200 Index gained 1.6 percent.
Japan’s Nikkei 225 stock average gained 0.6 percent since April 1 amid speculation damage was limited from a 7.1 magnitude aftershock that struck Japan on the Thursday night. Earlier that day, the Bank of Japan unveiled the earthquake lending facility, while voicing concern the destruction caused by the March 11 temblor may depress economic growth in the coming months.
“Investors are looking at a scenario that there will be reconstruction opportunities in Japan, but I think the issues will be more far-reaching,” said Pauline Dan, Hong Kong-based chief investment officer at Samsung Asset Management, which oversees US$72 billion. “We are still faced with a much higher inflationary situation because of higher demand for fuel and food.”
Singapore Exchange Ltd, which abandoned its US$8.8 billion bid for ASX Ltd after the deal was rejected by Australian Treasurer Wayne Swan, jumped 6.6 percent to S$8.38. ASX dropped 3.1 percent to A$33.33.
In other markets on Friday:
Manila closed 0.51 percent, or 21.57 points higher from Thursday at 4,241.00.
Wellington fell 0.15 percent, or 5.08 points, from Thursday to 3,445.28.
Mumbai fell 0.71 percent from Thursday, its fourth straight day of losses, as investors unwound positions ahead of the weekend, after a recent rally. The benchmark 30-share SENSEX closed down 139.73 points to 19,451.45.
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