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Asian stocks' gaining streak continues

‘SPRING HAS FINALLY COME’: Asian markets recovered from a six-year low as China’s trade surplus last month widened to US$18.6 billion from February’s US$4.8 billion gap


Asian stocks climbed for a fifth week, the longest streak of gains since February 2007, as Japan proposed a US$154 billion stimulus package and investors speculated the global recession is abating.

Orix Corp, Japan’s largest non-bank financial company, rallied 26 percent as Japan’s Prime Minister Taro Aso said he envisioned a stimulus package that would create 2 million jobs.

AU Optronics Corp (友達光電), the world’s third-biggest maker of liquid-crystal displays, climbed 12 percent as panel shipments jumped. Mazda Motor Corp, Japan’s second-largest car exporter, surged 33 percent, aided by the yen’s fall to a five-month low.

The MSCI Asia-Pacific Index climbed 1.5 percent this week to 87.97, the highest since Jan 12. Asian markets joined global stocks in a fifth weekly advance, lifting the MSCI benchmark from a six-year low.

“Spring has finally come to the market,” said Yoshihiro Ito, senior strategist at Okasan Asset Management Co, which oversees about US$9.3 billion. “We’ve seen indicators that suggest the economy is bottoming out. People’s view on the economic outlook is gradually turning optimistic and this is leading to the rebound in the equity market.”

Japan’s Nikkei 225 Stock Average gained 2.5 percent. South Korea’s KOSPI index added 4.1 percent as the strengthening won eased the foreign currency debt burden of lenders, including Woori Finance Holdings Co. India’s SENSEX added 4.4 percent amid easing inflation.

China’s central bank said yesterday that its foreign exchange reserves rose 16 percent from a year earlier to US$1.95 trillion by the end of last month, but growth slowed in the first quarter as exports and foreign investment slumped.

China’s reserves, already the world’s largest, increased by US$7.7 billion in the first quarter — US$146.2 billion less than during the same period last year, the People’s Bank of China said in a notice on its Web site.

The rise compared with a fourth-quarter increase of almost US$45 billion, Xinhua reported.

Nearly half of China’s foreign exchange reserves are invested in US treasuries and notes issued by other government-affiliated agencies. Chinese Premier Wen Jiabao (溫家寶) called on the US last month to safeguard those assets as America’s largest creditor.

The reserves last month ­increased by US$41.7 billion — US$6.7 billion more than the same period last year.

Exports fell 17 percent last month from a year earlier, the fifth straight monthly decline, but less severe than February’s 25.7 plunge, the sharpest in a decade, the customs agency reported on Friday. It said trade “showed clear signs of improvement.”

Imports fell by 25.7 percent, widening the Chinese trade surplus to US$18.6 billion from February’s US$4.8 billion gap.

Taiwanese share prices are expected to turn volatile next week as dealers look to the US corporate earnings season, which may dictate Wall Street’s movements, dealers said on Friday.

It remains to be seen whether foreign institutional investors will continue their buying after a strong market showing this week as it seems to be time for them to adjust their portfolios, they added.

While technical hurdles may cap market upside or even pull the index down next week, high liquidity in the market is expected to prevent it from falling below 5,500 any time soon, dealers said.

Stiff technical resistance is expected at around 5,900 points.

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