Asia’s benchmark stock index posted its first advance in three weeks as shares rallied by the most in nine months on Friday, after the European Central Bank (ECBP unveiled a bond-buying program and China boosted stimulus measures.
The MSCI Asia Pacific Index rose 1.1 percent to 119.1 this week. The gauge declined in the previous two weeks as signs of a global economic slowdown outweighed expectations for further stimulus measures.
The measure rallied by the most since Dec. 1 on Friday, after ECB President Mario Draghi said policymakers agreed to an unlimited bond-purchase program as they try to regain control of interest rates in the euro area.
“The risk premium on Asia could be lifted for a little while,” said Diane Lin, a fund manager with Sydney-based Pengana Capital Ltd. “Whether the ECB’s action itself is going to be sustainable and fundamentally improve the outlook, we still need to see.”
In Taipei, the TAIEX edged past the 7,400-point mark on Friday amid eased concerns over the debt problems in the eurozone, dealers said.
“After witnessing the solid gains on Wall Street and in the European markets, investors’ appetite to take risks swelled,” Hua Nan Securities (華南永昌證券) analyst Henry Miao (苗台生) said. “So investors rushed to pick up high-tech stocks throughout the session.”
Despite the upbeat mood toward the European financial situation, the gains were capped by stiff technical resistance as the market moved closer to 7,500 points, dealers said.
The TAIEX closed the week up 0.37 percent at 7,424.91.
“Although many investors have turned optimistic that the European debt problems will not worsen any time soon due to the ECB plan, it remains to be seen how and when the world’s economy will get out of the current stagnation,” Miao said.
“I expect the local bourse will fall into a consolidation mode for some time after the latest gains before jumping over the technical hurdles ahead,” Miao said.
China’s Shanghai Composite Index climbed 3.9 percent this week, the biggest weekly advance since the period ended Oct. 28 and the most among major Asia-Pacific indexes. The government on Friday announced plans to build 2,018km of roads, two days after unveiling plans to build subways in 18 cities. Required investments were not disclosed.
Hong Kong’s Hang Seng Index gained 1.6 percent. Japan’s Nikkei 225 Stock Average rose 0.4 percent. South Korea’s KOSPI increased 1.3 percent. Australia’s S&P/ASX 200 Index added 0.2 percent.
The MSCI Asia Pacific Index has fallen more than 7 percent from this year’s high on Feb. 29, dragging the value of shares on the Asian benchmark index to 12.5 times estimated earnings. That compares with 13.9 times for the S&P 500 and 12 times the STOXX Europe 600 Index.
In other markets on Friday:
Manila closed 0.99 percent, or 51.21 points, higher from Thursday at 5,201.32.
Wellington closed 0.78 percent, or 28.64 points, higher from Thursday at 3,722.18.
Mumbai rose 1.95 percent, or 337.46 points, from Thursday to 17,683.73.