Asia Stocks Outside Japan Gain; Silver Extends Streak

15-Feb-2014 Intellasia | Bloomberg | 6:00 AM Print This Post

Asian stocks outside Japan rose and silver headed for its longest rally since March 2008. The yen climbed against most major peers and Treasuries and Australian bonds (GACGB10) advanced before data expected to show the recovery in the US is moderating.

The MSCI Asia Pacific excluding Japan Index added 0.7 percent as of 2:51 p.m. in Hong Kong, and is on track for a 2.5 percent increase this week. Standard & Poor’s 500 Index futures slipped 0.2 percent. Japan’s Topix index tumbled as the yen climbed 0.3 percent versus the dollar. Indonesia’s rupiah increased as much as 1.2 percent, while Turkey’s lira declined 0.5 percent. The yield on Australia’s 10-year government bond fell 7 basis points while equivalent US yields dropped 2 basis points. Silver climbed an 11th day.

Stocks and developing-nation currencies are rebounding from a rout fueled by two rounds of Federal Reserve stimulus cuts. Chinese consumer prices rose faster than estimated in January, while producer costs fell in line with expectations before money-supply data due today or tomorrow. Italy’s prime minister Enrico Letta said he’ll resign today and data showed France’s economy grew quicker than forecast last quarter. Germany releases gross domestic product figures and reports in the US may show industrial output growth slowed last month while consumer sentiment is weakening in February.

“We remain positive on risk assets and don’t see any reason to pull back,” Manpreet Gill, a Singapore-based senior investment strategist at Standard Chartered Plc, said by phone. “Economic data in the US hasn’t been brilliant but the overall uptrend hasn’t really changed. Things need to materially become worse before we change our positive view on equities. Chinese inflation isn’t a worry as monetary policy in China remains pretty tight.”

Regional Rebound

The Asia-Pacific equity benchmark that includes Japanese shares is set to cap its first weekly advance this year, rebounding after losing 4.6 percent in January. The measure recorded the worst start to a year since 2009 amid concern about the Fed’s stimulus cuts, a slowdown in China and volatility in developing markets.

Global equity losses in 2014 peaked at $3 trillion on February 4 and narrowed to $511 billion yesterday, data compiled by Bloomberg show.

South Korea’s Kospi index gained 0.7 percent, while Australia’s S&P/ASX 200 Index climbed 0.9 percent.

A measure of Chinese shares in Hong Kong increased 0.6 percent and the Hang Seng Index advanced 0.5 percent. The Shanghai Composite Index added 0.7 percent.

Of the 334 companies on the Asian measure which have reported quarterly earnings since the beginning of January, and for which estimates are available, 54 percent beat projections, Bloomberg-compiled data show.

Treasuries, Yen

Futures on the S&P 500 dropped after the measure rose 0.6 percent yesterday. Better-than-forecast earnings and a $45.2 billion takeover of Time Warner Cable Inc. (TWC) outweighed a drop in retail sales. The US equity benchmark has added 170 percent since a March 2009 low.

The Topix index slid 1.3 percent as the Japanese yen rose for a third day against the dollar before the US data. The yen strengthened as much as 0.6 percent to 101.57 per dollar. It’s up 3.4 percent versus the greenback this year.

The euro bought 139.14 yen, 0.5 percent less than yesterday. In Italy, it will now be up to President Giorgio Napolitano to appoint a new prime minister or dissolve the legislature and call elections to choose a leader for the world’s 10th-largest economy.

The Bloomberg Dollar Spot Index was set for the lowest close in more than a month. The Korean won strengthened to 1,060.60 against the dollar, the highest since January 17. Indonesia’s rupiah climbed to 11,869, a level not seen since December 3.

Yields Drop

Benchmark US 10-year yields fell two basis points, or 0.02 percentage point, to 2.71 percent, Bloomberg Bond Trader data show, while the yield on 10-year Japanese sovereign bonds fell one basis point, heading for the longest streak of weekly declines in more than a decade. Australian government 10-year notes paid 4.1 percent.

Silver for immediate delivery appreciated as much as 1.7 percent to $20.8402 an ounce, the highest since November 15.

Spot gold advanced as much as 0.3 percent to $1,307.16 an ounce, the highest level since November 8, poised for a 3 percent climb this week. Holdings in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, increased 1.2 percent this week, the third straight gain, and the most since the five days ended September 21, 2012.

Palm oil futures rose as much as 1.1 percent to 2,685 ringgit per tonne, the highest since December 9 amid supply concerns. Inventories in Indonesia, the biggest supplier of palm oil, probably decreased in January to the lowest since June 2012 as production fell for a second month.


Category: FinanceAsia

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