Asian stocks rise to five-month high on US accord, faster Chinese growth

Bloomberg and CNA

Sun, Oct 20, 2013 - Page 15

Asian stocks rose for a second week, with the benchmark index climbing to a five-month high, after US lawmakers reached an accord to reopen the government and avoid a default.

The MSCI Asia Pacific Index gained 1.8 percent to 143.45 this week, the highest close since May 21. Shares also gained after data on Friday showed China’s annual economic growth accelerated to 7.8 percent in the third quarter

Asian shares gained this week after the US Senate crafted a bipartisan deal to end the government shutdown and raise the debt limit. Lawmakers passed the bill by wide margins before it was signed into law by US President Barack Obama.

“You had this cloud over the debt ceiling being resolved, and this opens the door for a new leg in the equity market toward year-end,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors. “Fundamentals are improving and you see solid numbers out of China and start seeing a turnaround in China’s growth.”

Taiwan’s TAIEX added 1.1 percent this week to close at 8,441.19 on Friday. It was the first time the index closed above 8,400 points in more than two years, with the electronics sector, headed by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), leading the advance.

However, the financial sub-index closed lower, after Taiwan and China failed to reach a consensus in a meeting on Thursday on making it easier for Taiwanese insurance companies to gain entry into China, dealers said.

TSMC rose 2.8 percent to close at NT$110 on Friday after the world’s largest contract chipmaker said at an investor conference on Thursday that it would maintain its technology lead over its peers, with chips using 20-nanometer process expected to account for 10 percent of its sales next year.

“TSMC is always a good pick as the company has strong fundamentals,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su said, referring to the firm’s record third-quarter sales and earnings.

Japan’s TOPIX also added 0.7 percent this week, while South Korea’s KOSPI gained 1.4 percent. New Zealand’s NZX 50 Index climbed 0.4 percent. Australia’s S&P/ASX 200 Index rose 1.7 percent after the nation’s central bank said it retains the option to loosen policy further to spur growth, according to minutes of the bank’s Oct. 1 meeting.

Singapore’s Straits Times Index advanced 0.4 percent and Hong Kong’s Hang Seng Index gained 0.5 percent, but China’s Shanghai Composite Index lost 1.5 percent.

In other markets on Friday:

Manila closed 0.72 percent higher from Thursday at 6,607.83.

Mumbai rose 2.29 percent to a near three-year high of 20,882.89.