Asian stocks gained this week, with the regional benchmark index posting its biggest weekly advance since December, after the US Federal Reserve said it will buy mortgage-backed securities to bolster economic growth.
Sony Corp, Japan’s biggest electronics exporter, climbed 8.3 percent in Tokyo. BHP Billiton Ltd, the world’s biggest mining company and Australia’s No. 1 oil producer, increased 4.2 percent in Sydney as commodities gained. Fraser & Neave Ltd rose 7 percent to a record high in Singapore after Thai billionaire Charoen Sirivadhanabhakdi offered to buy the rest of the developer and brewer for S$9 billion (US$7.4 billion).
“The Fed move has provided the market a shot in the arm,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd, oversees about US$124 billion. “This should help keep mortgage rates low and boost the housing sector. While there are still constraints to US growth, the Fed has pledged to keep stimulating the economy until the labor market improves.”
The MSCI Asia-Pacific Index advanced 3.8 percent this week to 123.60, the most since the period ended Dec. 2. It rose 5 percent through Friday this quarter amid speculation US, China and Europe will step up efforts to support economic growth. The Asian benchmark traded at 12.8 times estimated earnings, compared with 14.2 for the Standard & Poor’s 500 Index and 12.3 for the STOXX Europe 600 Index.
In Taipei, the TAIEX on Friday gained 2.1 percent, or 159.25 points, to 7,738.05, as the Fed’s latest bond-buying program fueled expectations of a liquidity-backed rally, pushing Taiwan’s benchmark index to a five-month high. The TAIEX rose 4.22 percent this week, led by gas and fuel stocks at 8.13 percent, market data showed.
South Korea’s KOSPI gained 4 percent as data showed the nation’s exports and imports increased last month from July and brokerages surged. Japan’s Nikkei 225 Stock Average rose 3.2 percent. Australia’s S&P/ASX 200 advanced 1.5 percent.
Hong Kong’s Hang Seng Index jumped 4.2 percent, while China’s Shanghai Composite Index slid 0.2 percent amid warnings that investors shouldn’t expect the same sort of massive stimulus that accompanied the economic downturn in 2008.
The MSCI Asia-Pacific Index on Friday rallied to its highest close since May 4 after the Fed’s move.
“The Fed’s statement made clear that this monetary easing will go on until employment growth is satisfactory,” said Akio Yoshino, chief economist in Tokyo at Amundi Japan Ltd, whose global parent has US$897 billion of assets under management. “This time around we have a clear link between the economy and monetary policy, and that’s a very big thing. It should give powerful support for markets to appreciate.”
Exporters to the US climbed for the week. Sony increased 8.3 percent to 983 yen in Tokyo. James Hardie Industries SE, the building materials supplier that counts the US as its biggest market, gained 3.5 percent to A$8.95 in Sydney. Li & Fung Ltd (利豐), the supplier of clothes and toys to retailers including Wal-Mart Stores Inc, rose 5.9 percent to HK$12.88 in Hong Kong.
Companies that do business in Europe rose after Germany’s Federal Constitutional Court cleared the way for a permanent euro-area bailout fund. Canon Inc, the world’s largest camera maker, added 7.5 percent to 2,783 yen in Tokyo. HSBC Holdings PLC, Europe’s biggest lender, gained 5.5 percent to HK$72.70.