Asian stocks fell on Friday, paring the regional benchmark index’s first weekly advance since July. Energy and material companies declined.
The MSCI Asia Pacific Index dropped 0.1 percent to 127.30 in Hong Kong. Most of this week’s 2 percent gain came on Wednesday, when stocks in Japan soared in a rally that analysts said was fueled by short-sellers closing bearish bets. Investors are grappling with heightened global equity volatility as they await the US Federal Reserve’s decision next week and watch developments in China.
“Markets have been wild and fear is still near its zenith,” said Tim Shirata, Los-Angeles based executive vice president at Guild Investment Management Inc. “Pessimism about China and the world economic outlook is widespread, and optimism about continued economic growth in the US is declining. We hold a lot of cash and are waiting patiently for opportunities to invest it.”
The Standard & Poor’s 500 Index rebounded from a selloff on Thursday amid low trading volumes. While Fed officials have in recent weeks acknowledged the global equity rout that followed China’s currency devaluation, they have not been willing to rule out an interest rate increase this month. Many economists are still predicting the Fed will hike its key rate even as rate futures traders have pared bets.
Japan’s Nikkei 225 Stock Average declined 0.2 percent, narrowing its first weekly advance in five weeks to 2.7 percent. After the gauge’s 7.7 percent surge on Wednesday, short-term price swings in Tokyo are topping those in Shanghai for the first time this year. The TOPIX climbed less than 0.1 percent on Friday.
With Japan’s economy struggling to gather momentum after a contraction last quarter, more than a third of economists see the central bank expanding monetary stimulus by next month, according to a Bloomberg News survey. Eleven of 35 respondents see the Bank of Japan stepping up its easing on Oct. 30, while two forecast a move as early as next week, the survey conducted from Monday to Thursday showed. The central bank last expanded asset purchases in October last year.
In Taiwan, the TAIEX rose 0.45 percent from Thursday and 3.8 percent from the previous week to close at 8,305.82 on Friday.
The weighted index posted its strongest gains on Wednesday, when it rose 3.56 percent, as investors took their cues from Wall Street’s robust showing the previous day, dealers said.
US stocks on Tuesday followed the upturn enjoyed by the China market on the same day, and regional markets followed suit on Wednesday, indicating that market sentiment has improved as global bourses stabilized, they said.
Foreign institutional investors turned into net buyers this week, logging net purchases of NT$17.61 billion.
Among the gainers, Largan Precision Co (大立光) a smartphone camera lens supplier to Apple Inc., rose 4.26 percent this week, while chip packaging and testing services provider Advanced Semiconductor Engineering Inc (日月光半導體) soared 14.8 percent.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most weighted stock in the local market, added 2 percent this week.
Taiwan Stock Exchange data showed that electronics recorded the largest increase among the major sectors on the main board, rising 8.11 percent this week, while the fuel/utility subindex posted the smaller increase, 1.18 percent.
Hong Kong’s Hang Seng China Enterprises Index slid 0.6 percent on Friday, paring its weekly gain to 6 percent, the most in five months. The stock index was 34 percent below its May peak on Thursday, leaving valuations cheaper than any other market in Asia, as a boom in mainland equities turned to bust.
The territory’s benchmark Hang Seng Index fell 0.3 percent and the Shanghai Composite Index added less than 0.1 percent. People’s Bank of China Governor Zhou Xiaochuan (周小川) said over the weekend the plunge in Chinese equities is almost over.
South Korea’s KOSPI retreated 1.1 percent, the most among major Asian equity benchmarks on Friday. Australia’s S&P/ASX 200 Index lost 0.5 percent and New Zealand’s NZX 50 Index declined 0.4 percent.
Singapore’s cash equity market was closed on Friday for a holiday as the nation headed to the polls.
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