Asian stocks rose this week, driving up the benchmark index by the most this year, on optimism the US Federal Reserve will succeed in stoking growth in the world’s biggest economy.
“We’re seeing follow-through strength in risky assets, suggesting that not all of the US quantitative-easing news was in the price,” said Prasad Patkar, who helps manage about US$1.8 billion at Platypus Asset Management Ltd in Sydney. “The market had been expecting a second round of easing, but it appears the rumor wasn’t bought to the extent feared. That’s why we’re not seeing any selling.”
The MSCI Asia-Pacific Index rose 4.2 percent this week to 134.82, its steepest increase since the five days ended Dec. 4 last year.
The gauge has risen about 12 percent this year on speculation profits will weather Europe’s debt crisis, China’s steps to curb property price gains and concern about the pace of US economic growth. Shares in the gauge trade at an average of about 15 times estimated earnings, the highest level since June.
The MSCI index had its biggest two-day gain since May and equity markets rose worldwide after the Federal Reserve said on Wednesday that it will purchase as much as US$600 billion of assets through June, expanding record measures to support the US economy.
Japan’s Nikkei 225 Stock Average climbed 4.6 percent in the four days it was open this week. Hong Kong’s Hang Seng Index surged 7.7 percent, South Korea’s KOSPI gained 3 percent. China’s Shanghai Composite Index surged 5.1 percent. Australia’s S&P/ASX 200 Index rose 3 percent.
About six companies in the MSCI Asia-Pacific Index have exceeded profit estimates for every five that have fallen short, based on Bloomberg data compiled from about 450 companies that have reported quarterly results since Oct. 7.
Taiwan’s TAIEX rose 91.49, or 1.09 percent, to 8,449.34 at the 1:30pm Taiwan trading close on Friday. The benchmark index gained 2 percent this week, the biggest advance in seven weeks.
The index hit a nearly 29-month high on further inflows of foreign funds, dealers said.
Interest was mainly in old economy stocks on expectations that a rising local currency will boost domestic asset value, they said.
The construction sector scored the highest gains, up 4.3 percent. Paper and pulp stocks rose 3.5 percent, textile shares added 3.4 percent, plastics and chemicals gained 3.1 percent and the foodstuff sector closed up 1.9 percent.
Kuala Lumpur, Mumbai and Singapore were closed for national holidays.
In other markets on Friday:
Manila slipped 1.10 percent, or 48.19 points, from Thursday to 4,349.11.
Wellington closed down 0.21 percent, or 7.08 points, from Thursday at 3,319.16.
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