Asian Stocks Rally With Nickel on Russia Sanctions
Asian stocks rebounded, with the the regional index rising from a five-week low, and nickel surged toward a bull market as investors weighed the impact of sanctions against Russia. Gold retreated a second day before the Federal Reserve begins discussing monetary policy today.
The MSCI Asia Pacific Index rose 0.5 percent by 3:17 p.m. in Tokyo, climbing from the lowest close since Feb. 7. Japan’s Topix index jumped 1 percent to snap a four-day rout. Standard & Poor’s 500 Index futures were little changed. Nickel climbed the most in two weeks as an export ban by Indonesia and the risk of further penalties for Russia’s actions in Ukraine raised supply concerns. Gold and silver slid at least 0.5 percent.
The U.S. and European Union imposed limited sanctions on some people linked to Russian efforts to annex Crimea, the Ukrainian territory that voted to join Russia in a disputed March 16 referendum. The Fed will press on with cuts to stimulus and switch to qualitative guidance for assessing rates, according to economists. Chinese property prices rose in 69 of 70 cities last month, data today showed amid reports a closely held real-estate developer collapsed with $567 million of debt.
“There will be some positive pass through into the Asian session from the gains in asset markets overnight,” said Mitul Kotecha, head of global markets research for Asia at Credit Agricole SA in Hong Kong, in an e-mailed note. “A degree of caution continues to be warranted given the still precarious situation in the Ukraine and ongoing tensions between Russia and the west. The reaction by the West in terms of sanctions was not seen to have a particularly detrimental impact on sentiment.”
Fed Survey
The Fed Open Market Committee will further scale back its stimulatory bond-buying program when its meeting concludes March 19, reducing purchases by $10 billion for the third time, according to 54 economists surveyed by Bloomberg March 14-17. Policy makers will scrap a 6.5 percent unemployment-rate target in favor of a range of economic indicators, 76 percent of the economists said.
All major equity gauges in Asia climbed today, with the exception of Jakarta Composite Index, which entered a bull market last week, and Singapore’s Straits Times Index. All 10 industry groups on the Asia-Pacific stocks measure increased.
Australia’s S&P/ASX 200 Index (AS51) climbed 0.5 percent after declining two days, while the Kospi Index in Seoul added 0.7 percent.
Japan’s Nikkei 225 Stock Average advanced 0.9 percent, also rebounding from the lowest level in five weeks. The yen, regarded with gold as a haven investment, lost 0.4 percent versus the dollar overnight and was little changed today.
Developer Collapse
Chinese property developer Zhejiang Xingrun Real Estate Co. doesn’t have enough cash to repay creditors that include more than 15 banks, according to Chinese officials who asked not to be named because they aren’t authorized to discuss the matter. The company’s majority shareholder and his son, its legal representative, have been detained and face charges of illegal fundraising, the officials said.
The Hang Seng Index climbed 0.4 percent, while a gauge of Chinese companies listed in Hong Kong added 0.2 percent. The Shanghai Composite Index increased 0.1 percent.
Gold for immediate delivery dropped to $1,360.66 an ounce. Prices climbed to $1,392.22 yesterday, the highest since Sept. 9, before declining 1.2 percent. Silver for immediate delivery retreated as much as 1 percent to $20.9765 an ounce and traded at $21.0610. Platinum fell 0.5 percent to $1,459 an ounce.
Nickel for delivery in three months in London rose as much as 2.2 percent to $16,225 a metric ton and traded at $16,220. A settlement of $15,942 would be 20 percent higher than the Nov. 27 closing low, meeting the common definition of a bull market. Russia’s OAO GMK Norilsk Nickel is the world’s biggest nickel producer.
Russian Equities
The ruble swung between gains and losses against the dollar and slipped 0.2 percent to 50.6181 per euro as Crimea said it will be adopted as the official currency, Itar-Tass reported. The ruble will be in circulation along with Ukrainian hryvnia until Jan. 1, 2016, according to the report. Moscow’s Micex (INDEXCF) index added 0.2 percent in early trade.
The ruble has weakened 9.4 percent against the dollar this year, more than any other of the 175 currencies tracked by Bloomberg except the Argentine peso, the Ukrainian hryvnia, the Kazakh tenge, Zambian kwacha and the Kyrgyz som.
EU foreign ministers meeting in Brussels agreed to freeze assets and put visa travel bans on 10 Russian politicians, three military leaders, including Black Sea Fleet Commander Aleksandr Viktorovich Vitko, and eight Crimean politicians.
U.S. Blacklist
The U.S. imposed measures on three members of Putin’s inner circle and four Russian parliament and senate committee leaders Leonid Slutsky, Andrei Klishas, and Yelena Mizulina, and upper house Speaker Valentina Matviyenko, according to a White House statement.
Putin responded by recognizing the breakaway Black Sea region as a sovereign state while Western leaders warned that Russia would face added sanctions, including possibly on energy assets, if it moved deeper into Ukraine.
“Further provocations will achieve nothing, except to further isolate Russia and diminish its place in the world,” U.S. President Barack Obama said yesterday at the White House. The U.S. can “calibrate our response” based on whether Russia chooses “to escalate or to de-escalate the situation.”
(By Nick Gentle)
Source: bloomberg
