Asia Stocks Rise as Copper Slips Amid China Stimulus Talk
Asian shares rose, with the regional index rebounding from its biggest two-week decline since June, and the yen fell. Nickel slid after a seventh weekly gain as a preliminary Chinese manufacturing gauge unexpectedly fell, while gold and silver retreated.
The MSCI Asia Pacific Index added 1 percent by 3:41 p.m. in Tokyo as a measure of Chinese companies in Hong Kong increased a second day after entering a bear market last week. Standard & Poor’s 500 Index futures increased 0.2 percent. The yen dropped 0.2 percent to the dollar. Nickel retreated 0.8 percent. Gold fell for the fifth time in six days and silver decreased 0.7 percent. Corn futures gained 0.7 percent.
China’s leaders pledged to accelerate policies to support the world’s second-largest economy, as data signals a slowdown is deepening. France, Germany, the euro zone and the U.S. also publish early indicators for March manufacturing today. U.S. President Barack Obama arrives in Europe today as Russia, which completed its annexation of Crimea last week, masses soldiers on the border with Ukraine.
“The worse the PMI data is, the bigger the chance of stimulus, so perhaps people are looking at it that way,” said Dariusz Kowalczyk, a Credit Agricole CIB strategist in Hong Kong. (HSCEI) “The negative data would probably only strengthen the resolve of those in government who want to spend more money and limit losses.”
Hang Seng
Today’s preliminary purchasing managers’ index from HSBC Holdings Plc and Markit Economics was at 48.1, from a final reading of 48.5 in February and below the 48.7 median estimate of 22 economists surveyed by Bloomberg. About two stocks rose for each that fell on the Asia-Pacific equity measure, with all 10 industry groups advancing after the gauge dropped 4.6 percent in the past two weeks.
Hong Kong’s Hang Seng Index added 1.6 percent amid volume that was more than 70 percent higher than the 30-day average for the time of day. The Hang Seng China Enterprises Index of Chinese companies listed in the city increased 2.7 percent after a 2.4 percent advance on March 21.
Tencent Holdings Ltd. (700), China’s biggest internet company, rallied 2.6 percent after Xinhua News Agency reported that the People’s Bank of China agreed to keep encouraging innovation in online finance. Hutchison Whampoa Ltd. (13), controlled by Asia’s richest man Li Ka-shing, fell 5.1 percent, the most in more than two years, after the company agreed to sell a 25 percent stake in its retail arm to Temasek Holdings Pte for HK$44 billion ($5.7 billion).
Broad Weakness
The CSI 300 Index (SHSZ300) of stocks in Shanghai and Shenzhen increased 0.7 percent after jumping 3.4 percent on Friday, the most since September, amid speculation that China would allow some companies to use preferred shares to raise funds.
“Weakness is broadly-based with domestic demand softening further,” Qu Hongbin, Hong Kong-based chief China economist at HSBC, said in a statement. “We expect Beijing to launch a series of policy measures to stabilize growth.”
China issued rules after markets closed March 21 for a trial program allowing companies to sell preferred stock, expanding financing options for the country’s banks as they seek to address tougher capital requirements. Companies will be able to issue the shares if they are included in the Shanghai Stock Exchange 50 A-Share Index, the China Securities Regulatory Commission said in a statement on its official microblog.
All but five of 33 industries on Japan’s Topix rose. The yen retreated before Bank of Japan Deputy Governor Kikuo Iwata speaks today amid bets the BOJ will boost stimulus to ease the impact of a planned tax increase due to take effect next week.
Micex, Ruble
Global stocks are down 1.3 percent this month as a run of disappointing economic reports and corporate defaults in China dented the outlook for global growth. Russia’s annexation of the Black Sea region of Crimea from Ukraine has also spurred losses, with the U.S. and Europe levying sanctions against businesspeople and members of President Vladimir Putin’s administration.
Russia’s ruble climbed 0.2 percent to 36.1730 versus the dollar today and added 0.2 percent against the euro to trade at 49.9283. The Micex Index of stocks in Moscow climbed 1.5 percent.
Ukraine’s foreign minister said the risk of war with Russia was growing amid calls from U.S. lawmakers for more Western support for the Kiev government. U.S. officials said Russian troops are massed along virtually the entire Ukrainian border and have about doubled in number from when Moscow’s defense ministry first announced military exercises near Ukraine.
Metals Retreat
Nickel, which hasn’t notched a weekly decline since the end of January, fell to $15,966 a ton in London. Copper for delivery in three months retreated as much as 0.9 percent to $6,419.75 a metric ton on the London Metal Exchange and was little changed at $6,476. The price touched $6,321 on March 19, the lowest level since July 2010.
Gold bullion for immediate delivery lost as much as 0.7 percent to $1,325.05 an ounce and was at $1,327.16. Prices dropped 3.5 percent last week, the most since the period ended Nov. 22. Gold for June delivery slid 0.6 percent to $1,327.60 an ounce on the Comex in New York.
Indonesia’s rupiah climbed 0.4 percent to 11,383 versus the dollar. India’s rupee added 0.4 percent to 60.7 versus the greenback, the highest since March 11.
Corn advanced for a second day on speculation that demand will increase for supplies from the U.S., the world’s biggest exporter. The corn contract for May delivery climbed as much as 1 percent before trading at $4.825 a bushel on the Chicago Board of Trade.
(By Nick Gentle and Rachel Evans)
Source: bloomberg
