Asian shares rose for a fifth week, the longest winning streak since March, as Japan’s Liberal Democratic Party (LDP) regained power on pledges to boost economic stimulus and the country’s central bank added to asset purchases. Stocks pared gains as US budget talks stalled.
The MSCI Asia Pacific Index advanced 0.7 percent to 128.30 this week, closing on Wednesday at it highest since August last year. Japanese shares led gains as the yen weakened after the LDP captured 294 seats in the 480-member lower house of Japanese parliament in elections last week.
“This is going to have a tremendous impact on the fortunes of Japanese exporters and the economy,” Ed Rogers, chief executive officer at Tokyo-based Rogers Investment Advisors, said in a Bloomberg Television interview.
Asia’s benchmark equities index rose about 18 percent from this year’s low on June 4 as central banks from the US, Europe, Japan and China took action to spur economic growth. The gauge traded at 14.6 times average estimated earnings compared with 13.9 for the Standard & Poor’s 500 Index and 12.8 times for the STOXX Europe 600 Index, data compiled by Bloomberg show.
Japan’s Nikkei 225 Stock Average advanced 2.1 percent this week. The Nikkei 225 has risen about 15 percent since Nov. 14, when the Japanese previous government said it would call elections. Shares climbed on expectations that the LDP will spend more to boost growth and push for a looser monetary policy.
Australia’s S&P/ASX 200 rose 0.9 percent. New Zealand’s NZX 50 Index gained 1.9 percent in Wellington. Hong Kong’s Hang Seng Index dropped 0.4 percent. The Shanghai Composite Index, which tracks stocks on the larger Chinese exchanges, added 0.1 percent.
Among benchmarks that declined, South Korea’s KOSPI fell 0.7 percent. The ruling New Frontier Party’s Park Geun-hye was elected president of South Korea on Thursday, becoming the first woman to lead Asia’s No. 4 economy.
In Taiwan, the TAIEX retreated 2.3 percent this week. Shares on the Taiwan Stock Exchange staged a technical rebound yesterday, but trading was light as many foreign investors were away for the weekend, dealers said. While select large-cap stocks, in particular in the high-tech sector, attracted bargain hunters, the gains were limited amid lingering concerns over a pending “fiscal cliff” in the US, dealers said.
In the rare Saturday session, held to make up for a session that will be lost during the extended New Year’s holiday, the market’s weighted index closed up 20.21 points, or 0.26 percent, at 7,540.14, after moving between 7,520.80 and 7,546.90. Turnover was an anemic NT$40.52 billion (US$1.39 billion), the lowest in a single trading session since Jan. 19, 2009.
The market opened up 0.23 percent and moved to the day’s high as bargain hunting focused on certain electronics heavyweights, like Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Hon Hai Precision Industry Co Ltd (鴻海精密), which assembles iPads and iPhones for Apple Inc, dealers said. Yet as the TAIEX moved closer to the 7,600 point mark, selling took over to cap the day’s gains, reflecting investors’ concerns over the US, they said.
The fiscal cliff refers to the US$500 billion in expiring tax cuts and automatic spending reductions that will start in the US on Jan. 1 if alternative deficit-cutting measures are not adopted.
“Many investors here are afraid that Wall Street will encounter further volatility due to the fiscal problems,” Mirae Asset Management analyst Arch Shih (施博元) said.
However, Shih added that because many foreign investors were absent from yesterday’s session, the low trading volume could not be used to draw a definitive conclusion on the direction of future trading.
Among the winning high-tech stocks in Taiwan yesterday was TSMC, the world’s largest contract chip maker, which gained 0.95 percent to close at NT$95.70, and Hon Hai, which added 1.26 percent to end at NT$88.10.
The paper and pulp sector scored the highest gains among the eight major sectors of the market, finishing up 2.2 percent. Machinery and electronics shares rose 0.6 percent, financial stocks added 0.4 percent, and the textile and construction sectors each closed up 0.3 percent. Bucking the broader market, cement stocks fell 1.0 percent, and food shares and plastics and chemical stocks ended down 0.3 percent.
In other markets on Friday:
Manila closed 0.45 percent higher from Thursday, adding 26.20 points to 5,823.94.
Wellington fell 0.51 percent, or 20.71 points, to 4,054.74.
Mumbai fell 1.09 percent, or 211.92 points, to 19,242.0 points.