Asian stocks rose this week, with the regional benchmark index capping its biggest quarterly gain since 2010, after US Federal Reserve Chairman Ben Bernanke said accommodative monetary policy was still needed. However, gains were limited amid concern that China’s economic slowdown is weighing on company earnings.
The TAIEX closed up 60.34 points, or 0.76 percent, at 7,933.00 on Friday on turnover of NT$99.02 billion (US$3.35 billion). The index dropped 2.3 percent last month, trimming gains in the past quarter to 12 percent, the best three-month performance since the period ending September 2010.
Meanwhile, shares in Hon Hai Precision Industry Co (鴻海精密), a unit of Foxconn Technology Group (富士康科技集團), retreated 1.3 percent to NT$114.50, the most since March 20. An -audit of Foxconn found “serious and -pressing” violations of Chinese labor laws. Inspectors found at least 50 breaches of Chinese regulations as well as the code of conduct Apple signed when it joined the Fair Labor Association in January after the deaths of workers at suppliers, the monitoring group said yesterday.
Despite that, Hon Hai rose 8 percent to NT$114.50 through the week as the firm announced fourth-quarter net income which climbed 64 percent to NT$35 billion surpassing each of the nine analysts’ estimates compiled by Bloomberg, and the average of NT$26.6 billion.
The MSCI Asia Pacific Index rose 0.2 percent to 126.60 this week. The measure jumped 11 percent for the first three months this year, as US economic optimism and monetary easing in Europe, Japan and China fueled the fastest quarterly rally since September 2010.
Measures of volatility dropped across the region this week. The KOSPI 200 Volatility Index touched its lowest level since July last year the Hang Seng Index Volatility Index fell to a level not seen since August last year, on Tuesday.
The US Federal Reserve Chairman Ben Bernanke said on Monday that while he is encouraged by the unemployment rate’s decline to 8.3 percent, continued accommodative monetary policy would be needed to make further progress. Stocks gained the following day as some investors bet Bernanke’s comments indicate further policy easing is still under consideration.
Fed policymakers “still have an option of doing more, but I think it was just reinforcing the view that they are not going to reverse policy quickly,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about US$150 billion. “There’s going to be a lot of liquidity provided for the market and economy. Obviously equity investors are taking it in a positive way.”
In other markets on Friday:
Manila rose 0.44 percent, or 22.49 points, to 5,107.73
Wellington gained 0.40 percent, or 14.11 points, to 3,509.55
Mumbai jumped 345.59 points, or 2.03 percent, to 17,404.2