Asian stocks rose this week, reversing three consecutive weeks of declines, after US economic reports and eased concern over Europe’s sovereign debt crisis added to confidence in the global economic recovery.
The MSCI Asia-Pacific Index rose 3.5 percent to 133.44 this week, reversing three consecutive weeks of declines. Reports in the US showed consumer confidence rose to the highest level in five months last month and jobless benefits over the past month on average dropped to a two-year low.
“The economic data is clearly improving,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors Ltd, which manages about US$93 billion and is a unit of AMP Ltd, Australia’s second-largest asset manager. “US housing is showing signs of life and the employment trend is finally looking encouraging. The easing of European debt concerns is releasing a handbrake on markets.”
In Japan, the Nikkei 225 Stock Average gained 1.4 percent, its fifth straight weekly advance, while Australia’s S&P/ASX 200 climbed 2.1 percent.
South Korea’s KOSPI gained 2.9 percent this week, even as tensions escalated in the region following an attack by North Korea on South Korean soil on Nov. 23.
Hong Kong’s Hang Seng Index rose 1.9 percent. The Shanghai Composite Index retreated 1 percent, its fourth week of declines, as Fan Gang (樊綱), a former adviser to the People’s Bank of China, said China may have room to further tighten monetary policy.
The country will shift to a “prudent” monetary policy from a “moderately loose” one that has been in place since late 2008, the state-run Xinhua news agency said on Friday after a meeting of the Chinese Communist Party’s Politburo.
All 10 industry groups on the MSCI Asia-Pacific Index rose this week, led by a 4.7 percent increase from information technology shares, followed by material companies.
The MSCI Asia-Pacific Index has risen 10.8 percent this year, with stocks on the gauge valued at 14.6 times estimated earnings on average, compared with 23 times at the start of the year.
Taiwan’s TAIEX rose 38.24, or 0.45 percent, to 8,624.01 at the 1:30pm Taipei trading close on Friday, the fifth day of gains and the highest since June 6, 2008. The benchmark gained 3.8 percent this week, the biggest advance since the week to June 10.
“It seems that sentiment toward the global foundry business improved to some extent after a strong showing by the US semiconductor sector,” TLG Asset Management (台壽保投信) analyst Arch Shih (施博元) said.
Shih said the IC sector had previously been overshadowed by pessimism that demand for IC and related products would weaken in the fourth quarter.
“It turns out that global demand appears better than expected. An upbeat mood has triggered buying at home and abroad,” Shih said.
Earlier in the week, Taiwan Semiconductor Manufacturing Co (台積電) forecast that the foundry industry is likely to grow 14 percent next year.
However, Shih said after the market breached the key 8,600-point level, technical pressure accumulated, prompting many investors to stay on the sidelines.
“Investors had better exercise caution at the moment,” he said.
In other markets on Friday:
Manila rose 0.66 percent, or 27.58 points, from Thursday to 4,176.48.
Wellington ended flat, edging down 2.19 points from Thursday to 3,283.30.
Mumbai fell 0.13 percent, or 25.77 points, from Thursday to 19,966.93. It followed four straight days of gains after an announcement that the economy grew by a forecast-beating 8.9 percent in the third quarter.
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