Asian stocks capped the biggest weekly gain since January as eurozone leaders agreed to relax conditions for recapitalizing lenders and amid speculation China would do more to shore up growth. The advance pared the regional benchmark index’s first quarterly loss since September.
The MSCI Asia Pacific Index rose 2.7 percent to 117.22 this week, the biggest advance since the week ended Jan. 20. The gauge advanced 4.1 percent this month, paring its quarterly loss to 7.4 percent.
“It seems very significant,” Jonathan Garner, Hong Kong-based chief strategist at Morgan Stanley, said of the European leaders’ decision. “One of the key problems around Greece was the official lenders putting themselves in a senior position to existing bondholders, and that immediately impaired the Greek government debt. One of the worries the market’s had about the Spanish bank bailout is that the same thing would be repeated.”
The Asian benchmark index rose 3 percent in the first six months of this year. Stocks in the index are valued at 12 times estimated earnings on average.
Financial companies and healthcare stocks led gains through the first half. Materials and energy companies had the biggest declines among the Asia-Pacific gauge 10 industries, as Europe’s crisis and China’s slowdown sent commodity prices into a bear market.
In Taiwan, the EU decision sent the TAIEX up 1.8 percent on Friday to 7,296.28. Financials attracted interest because of reduced worries over European debt, while large-cap tech and old economy stocks were boosted by bargain hunting.
Fubon Financial Holding Co (富邦金控) rose 2.6 percent to NT$29.80, and Cathay Financial gained 2.1 percent to NT$29.25.
Among tech stocks, United Microelectronics Corp (聯電) rose by the 7 percent daily limit to close at NT$12.90, while Taiwan Semiconductor Manufacturing Co (台積電) rose 1.8 percent to NT$81.30.
Touch panel maker Wintek (勝華) rose 2.8 percent to NT$16.30, after it announced it would provide screens for Google’s Nexus 7 tablets.
For the month, the TAIEX was down 0.1 percent, its fourth month of losses. The gauge fell 8 percent this quarter, its steepest slide since the third quarter last year. However, the measure has climbed 3.2 percent this year, its first six-monthly gain since the second half of 2010.
The Hang Seng Index gained 2.4 percent this week after the Hong Kong exchange agreed to set up a joint venture to develop equity derivative products with its mainland Chinese counterparts.
Regulators on both sides of the border announced after markets closed on Friday that they had approved for listing in China the first exchange-traded funds (ETF) to track Hong Kong indexes. A yuan-denominated ETF in Hong Kong will track shares traded on the Shanghai and Shenzhen bourses.
Japan’s Nikkei 225 Stock Average climbed 2.4 percent, a fourth weekly gain, after the nation’s retail sales grew more than expected in May. South Korea’s KOSPI added 0.4 percent. Australia’s S&P/ASX 200 Index rose 1.2 percent.
In other markets on Friday:
Wellington fell 0.04 percent, or 1.51 points, from Thursday to 3,399.84.
Manila closed 0.19 percent, or 9.74 points, at 5,246.41.
Mumbai rose 2.59 percent, or 439.22 points, to 17,429.98.