Asian stocks climbed for a sixth week, the longest streak of gains in more than two years, on increasing confidence the worst of the global recession is over.
China Cosco Holdings Co, the world’s largest operator of dry-bulk ships, surged 21 percent on rising Chinese exports and shipping rates. PT Bumi Resources, Asia’s largest exporter of power-station coal, jumped 21 percent in Jakarta as elections strengthened the hold Indonesia’s president has over parliament. JFE Holdings Inc, Japan’s No. 2 steelmaker, soared 22 percent on speculation it won’t make large price cuts and as the government unveiled a record stimulus package.
“We’re probably seeing a bottoming out in the economy,” said Arjuna Mahendran, Singapore-based chief investment strategist for Asia at HSBC Private Bank, which oversees US$494 billion in assets. “The second quarter will be good for stocks as corporate earnings should bounce.”
The MSCI Asia-Pacific Index rose 2 percent this week to 89.69, completing the longest stretch of gains since December 2006. Asian markets have rallied 27 percent since the MSCI benchmark dropped to a six-year low on March 9.
Japan’s Nikkei 225 Stock Average lost 0.6 percent. South Korea’s KOSPI index dropped 0.5 percent as brokerages cut recommendations on financial companies. Thailand’s SET Index gained 0.6 percent in a week shortened by new year holidays. The Thai government called a state of emergency following clashes between security forces and protesters in Bangkok.
MSCI’s Asian index plunged by a record 43 percent last year as the credit crunch tipped the world’s largest economies into recession, forcing companies to cut jobs amid slumping profits.
The gauge has rallied 27 percent from a five-year low reached on March 9 amid signs government measures to ease the financial crisis are working. Earnings estimates for companies included in the MSCI benchmark started to rise this month after a year of falling predictions, data compiled by Bloomberg showed.
China’s exports rose 39 percent last month from a month earlier, the customs bureau said on April 10, when Hong Kong markets were shut for a holiday. The Baltic Dry Index, a measure of shipping costs for commodities, jumped 13.8 percent this week. The gauge had slumped as much as 94 percent from a peak in May last year.
China posted a 6.1 percent annualized growth rate for the first quarter, the slowest rate of expansion in nearly a decade. That may mark the bottom for the world’s third-largest economy as a 4 trillion yuan (US$585 billion) stimulus package cushions the effects of the global recession.
Taiwanese share prices are expected to fall further in the week ahead following steep losses on Friday, with the market having failed to push above the key 6,000 point mark this week, dealers said.
Friday’s decline prompted many investors to be wary of stiff technical resistance ahead of 6,000 points, with the market having gained more than 30 percent since the beginning of last month, they said. Analysts said market sentiment toward the bellwether electronic sector is likely to turn cautious as high-tech heavyweights start to release their first quarter results next week.
However, companies with close business ties to China may attract interest, as they are expected to outperform the broader market, they added.