Asian stocks snap five weeks in red

Bloomberg and AFP

Sun, Jun 10, 2012 - Page 10

Asian stocks rose this week, ending a five-week streak of declines, as global policymakers in the US, Europe and China signaled they would take steps to stimulate growth. Shares pared gains yesterday amid concern China’s economy is slowing.

HSBC Holdings PLC, a lender that gets about a fifth of its revenue from North America, rose 3.5 percent in Hong Kong. Gree Inc, a Japanese social networking site, surged 21 percent in Tokyo after announcing a new game. Qantas Airways Ltd, Australia’s largest carrier, slumped 34 percent in Sydney after forecasting a full-year loss.

The MSCI Asia Pacific Index rose 0.1 percent to 111.50 this week, ending its longest weekly losing streak since June last year. The gauge has tumbled 14 percent from this year’s high on Feb. 29 amid concern Europe’s debt crisis is worsening and signs China’s economy is slowing.

“We are likely to see a reasonably strong policy response in a number of countries,” said Angus Gluskie, managing director at White Funds Management in Sydney. “It’s stacking up to be a reasonably good buying opportunity.”

Japan’s Nikkei 225 Stock Average gained 0.2 percent this week, while the TOPIX rose 1.2 percent, rebounding after the gauge plunged to its lowest level since 1983 and entered a bear market on disappointing US jobs and China services data.

Taiwan’s TAIEX lost 1.5 percent for the week, while Hong Kong’s Hang Seng Index slid 0.3 percent. China’s Shanghai Composite Index retreated 3.9 percent and South Korea’s KOSPI rose 0.1 percent.

Australia’s S&P/ASX 200 was little changed even after a report the nation’s economy expanded twice as fast as economists estimated in the first quarter from the previous three months.

Asian shares declined on the first trading day this week after reports showed China’s non-manufacturing industries expanded at the slowest pace in more than a year and US hiring missed even the most-pessimistic forecast. The unemployment rate rose to 8.2 percent and manufacturing index retreated from a 10-month high.

The Asian gauge rallied the next three days as disappointing economic data and signals from global policymakers added to speculation that fresh stimulus measures would be introduced to support growth.

European Central Bank President Mario Draghi said officials should stand ready to act as the eurozone’s growth outlook worsens. US Federal Reserve Vice Chair Janet Yellen said the US economy “remains vulnerable to setbacks” and may warrant additional monetary stimulus. Dennis Lockhart, president of the Fed’s Atlanta bank, said extending “Operation Twist,” a policy of buying longer-term bonds, is an “option on the table.”

“There may be fatigue in being bearish,” said Yoji Takeda of RBC Investment Management (Asia) Ltd in Hong Kong. “Stocks look very cheap because they’ve been sold down.”

Shares in the region pared gains on Friday after China cut borrowing costs and relaxed controls on bank lending and deposit rates.

“Growth worries could weigh on market sentiment,” Lu Ting (陸挺), an economist at Bank of America Corp, wrote in a report.

The timing of China’s interest-rate cut suggests that economic data for last month may be worse than expected, he said.

Fed Chairman Ben Bernanke damped expectations for monetary stimulus later in the week, after saying the Fed would need to assess conditions before deciding if more measures are required to stoke an economy threatened by Europe’s debt crisis and US budget cuts.

In other markets on Friday:

Manila shed 0.57 percent, or 28.89 points, from Thursday to end at 4,994.07.

Wellington closed 0.70 percent, or 24.48 points, lower from Thursday at 3,449.47.

Mumbai gained 0.42 percent, or 69.82 points, from Thursday to 16,718.87.