Asian stocks rose on Friday, with the benchmark gauge heading for its first weekly advance in three weeks, as Hong Kong shares climbed on bets an exchange link with Shenzhen will start soon and Japan’s TOPIX gained amid buybacks.
Hong Kong Exchanges & Clearing Ltd jumped 5 percent amid speculation the announcement of the start date of the link is imminent. Dentsu Inc surged 14 percent to a record after the Japanese advertising company said it would repurchase shares. Amorepacific Group, a South Korean cosmetics maker, added 4 percent in Seoul after earnings beat estimates.
The MSCI Asia Pacific Index increased 1.2 percent to 153.29 on Friday. The measure advanced 1.1 percent this week.
“There are some market talks that the Hong Kong Stock Exchange will announce details on the Shenzhen connect this weekend, with the starting date being in September,” said Yen Chiu, a Hong Kong-based trader at Shenwan Hongyuan Group. “The rally seems to be speculation-driven for now.”
Japan’s TOPIX climbed 1 percent. Hong Kong’s Hang Seng Index advanced 2 percent, while the Hang Seng China Enterprises Index of mainland shares traded in the territory added 1.7 percent. The Shenzhen Composite Index fell 0.5 percent at the close, paring a 1.9 percent loss.
In Taiwan, the TAIEX lost 0.3 percent on Friday, failing to sustain early gains amid worries over further volatility down the road, dealers said.
The bellwether electronics sector continued trending lower at the close because of lingering concerns over slow-season effects, they said.
After a 2.66 percent plunge on Thursday, the financial sector only staged a mild technical rebound, as investors feared that falling US bond prices would erode financial holding companies’ overseas investment returns, dealers said.
The TAIEX closed down 31.35 points at 9,579.48 on turnover of NT$83.77 billion (US$2.75 billion). It was the 10th losing session out of 13 since the market hit a 15-year closing high of 9,973.12 on April 27.
“The thin turnover showed that many investors were reluctant to chase prices even when the market staged a rebound in the early session,” Concord Securities (康和證券) analyst Kerry Huang said.
“Without trading volume expanding significantly, it was hard for the index to overcome the nearest technical resistance at the 60-day moving average, so it fell back and dipped below the 9,600-point level today,” Huang said.
The electronics sub-index ended down 0.14 percent.
Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, fell 0.64 percent to close at NT$93.10, and smartphone camera lens provider Largan Precision Co (大立光) lost 0.96 percent to end at NT$3,080.00. Both firms are Apple Inc suppliers.
Bucking the broader market’s downturn, Quanta Computer Inc (廣達), the world’s largest contract notebook computer maker, gained 2.81 percent to close at NT$76.90 after reporting better operating and gross margins for the first quarter.
In the financial sector, which closed up 0.45 percent, Fubon Financial Holding Co (富邦金控) rose 0.95 percent to close at NT$63.70, and Cathay Financial Holding Co (國泰金控) added 1.49 percent to end at NT$54.40.
“After the sell-off seen Thursday, the market needs more time to consolidate before making a meaningful comeback. Before any breakthrough, trading is expected to remain quiet in the near term,” Huang said.
Australia’s S&P/ASX 200 Index increased 0.7 percent. New Zealand’s NZX 50 Index gained 0.4 percent. Singapore’s Straits Times Index added 0.2 percent. South Korea’s KOSPI slipped 0.7 percent.
China’s Shanghai Composite Index sank 1.6 percent on concern new share sales would lure funds from existing equities and sluggish economic growth would hurt earnings. Data from factory output to retail sales and new lending all trailed estimates this week after the central bank raised interest rates for the third time since November to shore up the economy. New equity offerings will probably lock up 2.79 trillion yuan (US$450 billion) starting next week, based on the median estimate of analysts in a Bloomberg survey.
“The recently released economic data was poor,” said Gerry Alfonso, a trader at Shenwan Hongyuan Group Co in Shanghai, the second-largest listed Chinese brokerage. “Investors are now back to stock picking and there are no clear short-term catalysts. There is also a new round of IPOs [initial public offerings] and investors are likely to be selling some of their holdings.”
In other markets, Manila added 0.64 percent, Kuala Lumpur rose 0.24 percent, Mumbai rose 0.43 percent and Bangkok closed up 0.99 percent. Jakarta ended down 0.36 percent.
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