Asian stocks rose this week, with a regional benchmark index paring the biggest monthly slump since May last year, as exporters and commodity producers climbed on optimism that the US and Chinese economies are recovering.
In Taipei, the TAIEX fell 0.7 points, or 0.01 percent, on Friday to 7,757.06. The benchmark rose 4.2 percent this week, the biggest advance since July last year.
Li & Fung Ltd (利豐有限公司), a supplier of toys and clothes to Wal-Mart Stores, jumped 4.9 percent in Hong Kong after US reports showing higher factory orders and consumer spending tempered concern that an economic recovery is faltering. Jiangxi Copper Co (頁庫存檔) advanced 10 percent as Chinese manufacturing expanded. Stocks fell on Friday ahead of a US jobs report that showed employment growth stagnated last month, paring the MSCI Asia Pacific Index’s greatest weekly gain since March.
“Concern about the health of the US economy was near the top of the laundry list of worries for investors,” said Prasad Patkar, who helps manage the equivalent of US$1.1 billion at Platypus Asset Management Ltd in Sydney. “If the data keeps reinforcing the idea that a new recession is unlikely, markets could rally strongly this quarter. The latest manufacturing data confirms that China’s economy was never headed for a hard landing.”
The MSCI Asia Pacific Index rose 3.2 percent this week to 124.16, extending last week’s 0.7 percent advance. The gauge tumbled 14 percent in the previous four weeks as equity indexes in Australia, Hong Kong and Shanghai entered so-called bear markets, tumbling at least 20 percent from their peaks. The stocks rout was fueled by concern that Europe’s debt crisis is worsening and after a US credit ratings downgrade by Standard & Poor’s.
Stocks in the Asian benchmark are valued at about 12.2 times estimated earnings on average, compared with 11.7 times for the S&P 500 and 9.7 times for the STOXX 600.
Japan’s Nikkei 225 Stock Average gained 1.7 percent this week and South Korea’s KOSPI Index jumped 5 percent. Australia’s S&P/ASX 200 Index advanced 1 percent in Sydney.
Hong Kong’s Hang Seng Index surged 3.2 percent. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong climbed 3.5 percent after a report showed that the nation’s manufacturing expanded at a faster pace in August. Chinese manufacturing increased from a 29-month low, indicating that the economy is withstanding attempts to cool prices.
China’s government has raised interest rates five times since the start of last year and boosted reserve requirements for banks to help control inflation. Stabilizing prices is the country’s top priority and the government doesn’t plan to alter the direction of economic policies, Chinese Premier Wen Jiabao (溫家寶) said in an article that appeared on Thursday on the Web site of the Communist Party’s Qiushi magazine.
Asian stocks climbed this week after US consumer spending and car sales increased, while business activity and factory orders expanded at a faster pace than economists forecast. That bolstered gains after US Federal Reserve Chairman Ben Bernanke said on Aug. 26 that the nation’s central bank has more means to help growth.
The MSCI Asia Pacific index pared gains on Friday ahead of a report that showed the US jobless rate remained at 9.1 percent, and after UBS AG lowered its year-end target for the MSCI Asia Pacific Index Excluding Japan Index by 13 percent. The bank said equities remain “broadly out of favor” amid signs that global economic growth is slowing.