Sun, Aug 28, 2011 - Page 10 News List

Asian markets mixed ahead of Bernanke speech

ROLLER-COASTER:Asian equities fluctuated this week as companies across the region reported mixed profit results and waited for the US’ next move

Bloomberg and AFP, HONG KONG

Asian stocks rose this week, snapping four weeks of losses, as dealers looked ahead to a highly anticipated speech by US Federal Reserve Chairman Ben Bernanke later in the day.

Asian stocks swung between gains and losses throughout the week as companies across the region reported mixed profit results. Bernanke said on Friday the Fed still has tools to stimulate an economic recovery, without giving details.

The recovery is likely to pick up this speed in the second half of this year, he told an annual forum in Jackson Hole, Wyoming.

“Equity markets are not only looking toward the Jackson Hole speech, but also at the real economy,” said Pu Yonghao, chief investment strategist at UBS Wealth Management in Hong Kong.

Recent data “are all pointing toward slower growth, if not recession,” he said in a Bloomberg Television interview on Friday before Bernanke spoke.

The MSCI Asia Pacific Index rose 0.7 percent this week to 120.31. The gauge tumbled 14 percent in the previous four weeks as equity indexes in Australia, Hong Kong and Shanghai entered a so-called bear market, tumbling at least 20 percent from their peaks. Investors fled equities amid concern Europe’s debt crisis is worsening and US would slow following its credit downgrade by Standard & Poor’s.

Stocks in the Asian benchmark are valued at about 12 times estimated earnings on average, compared with 11.8 times for the S&P 500 and 9.4 times for the STOXX 600.

Taiwan’s TAIEX on Friday rose 34.23 points, or 0.46 percent, to 7,445.1. The index has gained 1.4 percent this week, halting a four-week slump.

Japan’s Nikkei 225 gained 0.9 percent this week, even after Moody’s Investors Service lowered Japan’s sovereign-credit rating, citing “weak” prospects for cutting the country’s debt burden. South Korea’s KOSPI climbed 2 percent.

Hong Kong’s Hang Seng Index advanced 0.9 percent this week after a report showed China’s factory output may contract at a slower pace this month, easing concern the mainland’s economy is slowing.

Shanghai’s Composite Index added 3.1 percent. Australia’s S&P/ASX 200 Index jumped 2.4 percent this week, after falling as much as 3.5 percent. Singapore’s Straits Times Index rose 0.5 percent.

Central bankers from around the world met in Jackson Hole at the conference sponsored by the US Federal Reserve Bank of Kansas City on Friday. That is the same place where Bernanke triggered financial rallies a year ago when he said the Fed was prepared to “do all that it can” to ensure economic recovery.

The introduction of further quantitative easing “will provide a short-term relief to the market,” Hong Kong-based Pauline Dan, chief investment officer at Samsung Asset Management, said before the meeting.

“Investors are hoping the Fed will show its commitment to supporting growth,” said Nader Naeimi, a Sydney-based strategist for AMP Capital Investors Ltd, on Tuesday. “There’s a real risk of disappointment if some sort of strong commitment doesn’t appear.”

In other markets on Friday:

Manila closed 0.9 percent, or 39.20 points, lower from Thursday at 4,303.49.

Wellington fell 0.15 percent, or 4.95 points, from Thursday to 3,296.63.

Mumbai slid 1.84 percent from Thursday, hitting an 18-month-low in nervous trade.

The benchmark 30-share SENSEX closed down 297.5 points to 15,848.83, its lowest closing since February last year.

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