Asian stocks rose, with the regional benchmark index posting its seventh weekly advance, after the US Congress passed legislation on a budget deal and manufacturing reports from China and the US added to signs of a global recovery.
The MSCI Asia Pacific Index gained 1.8 percent to 131.89 in its seventh weekly advance, the longest such winning streak since March last year. The Nikkei 225 Stock Average jumped 2.8 percent on Friday in Japan’s first trading day of the year, closing at the highest level since March 2011. The MSCI Asia Pacific Index, excluding Japan, rose 2 percent this week.
“The global economic outlook is improving,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd. “That will underpin further gains in share markets along with very easy monetary conditions. That probability of the ‘fiscal cliff’ and a US recession has been taken out.”
Australia’s S&P/ASX 200 Index gained 1.1 percent this week, while South Korea’s KOSPI added 0.8 percent. Hong Kong’s Hang Seng Index climbed 2.9 percent and the Shanghai Composite Index advanced 2 percent.
Elsewhere in the region, Taiwan’s TAIEX posted a weekly gain of 1.4 percent after falling 0.39 percent on Friday to end the week at 7,805.99, compared with 7,699.5 on Friday last week.
A gauge of China’s manufacturing on Tuesday showed a third month of expansion last month, adding evidence that the recovery in the world’s second-biggest economy will extend into the new year. China’s services industries grew at its fastest pace in four months, an index showed on Friday.
The regional benchmark MSCI Asia Pacific Index surged 14 percent last year as central banks from the US, Europe, Japan and China took action to spur economic growth. The Asia Pacific gauge traded at 14.1 times average estimated earnings, compared with about 13.2 times for the Standard & Poor’s 500 Index and about 11.9 times for the STOXX Europe 600 Index, data compiled by Bloomberg show.
Exporters advanced as manufacturing in the US, a major market for Asian companies from carmakers to electronics manufacturers, expanded last month. The US Congress passed budget legislation, breaking a year-long impasse over how to head off automatic tax increases and spending cuts.
Raw material producers and energy companies posted the week’s biggest advance among the 10 industry groups in the MSCI Asia Pacific Index amid signs that China, the world’s biggest consumer of energy and copper, is recovering from seven quarters of slow growth.
In other markets on Friday:
Manila rose 0.63 percent, or 37.40 points, from Thursday to 5,971.45.
Wellington fell 0.18 percent, or 7.33 points, to 4,075.04.
Mumbai rose 0.10 percent, or 19.30 points, to 19,784.08.