Asian Stocks Rise on Stimulus as Oil Drops With Copper
Asian stocks rose for a seventh day in the longest rally this year as the Japanese yen reached a two-month low and China’s government announced stimulus measures. European equity index futures, copper and oil fell.
The MSCI Asia Pacific Index added 0.2 percent by 1:46 p.m. in Hong Kong, as Japan’s Topix index gained 0.7 percent. Euro Stoxx 50 futures fell 0.2 percent, while those on the Standard & Poor’s 500 slid 0.1 percent. The yen reached 104.07 per dollar before U.S. data forecast to show services and nonfarm payrolls strengthened. Copper dropped 0.6 percent and oil slid 0.2 percent.
China’s government will sell 150 billion yuan ($24 billion) of bonds this year to fund railways for less-developed regions and extend preferential taxes to more small companies, the State Council said in a statement yesterday. The European Central Bank will probably keep interest rates at a record low today, even as International Monetary Fund Managing Director Christine Lagarde said more monetary easing is needed.
“We are starting to see more positive talk from officials in terms of the potential for stimulus” in China, said Angus Gluskie, managing director at White Funds Management in Sydney, who helps oversee about $550 million. “You have European and U.S. economies that continue to recover after particularly poor conditions a few years ago. Overall, employment and general economic activity continue to move up.”
Support Package
Hong Kong’s Hang Seng index gained 0.2 percent. China Railway Group Ltd. surged 5.9 percent in Hong Kong, while China Railway Construction Corp. rallied 7.2 percent. Prada SpA sank 6.9 percent after the Italian handbag maker forecast slower luxury sales growth.
The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong increased 0.9 percent, heading for its highest close since Jan. 22. Shanghai stocks swung between gains and losses. The Chinese yuan was little changed at 6.2070 per dollar. An official gauge of non-manufacturing gauge dropped to 54.5 last month from 55 in February.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was near its highest level since March 25 after climbing 0.2 percent yesterday.
U.S. employers probably added 200,000 workers to nonfarm payrolls in March, the biggest increase since November, according to a Bloomberg survey of economists before tomorrow’s Labor Department report. ADP Research Institute said yesterday that payrolls rose by 191,000 workers last month, up from a 178,000 gain in February that was stronger than first estimated.
“The market is becoming optimistic on the nonfarm payrolls report tomorrow,” said Kumiko Ishikawa, a currency analyst at Gaitame.com Research Institute Ltd. in Tokyo. “The dollar’s upward trend versus the yen will continue if the number comes in pretty solid.”
Australian Dollar
Yields on 10-year U.S. Treasuries were little changed at 2.80 percent, after rising five basis points yesterday as the S&P 500 gained 0.3 percent. Similar-maturity Australian government debt yields climbed four basis points to 4.2 percent.
The Australian dollar slipped 0.3 percent to 92.19 U.S. cents after data showed retail sales rose 0.2 percent in February, less than the median estimate in a Bloomberg survey for 0.3 percent. The Philippine peso dropped 0.4 percent and the Malaysian ringgit lost 0.4 percent.
The euro was little changed at $1.3760 today after falling 0.2 percent in the last session. The common currency was also steady at 143.05 versus the yen.
ECB policy makers will probably keep the benchmark rate at 0.25 percent, according to a Bloomberg survey of economists. Brazil’s central bank raised its target interest rate for a ninth straight meeting, by 25 basis points to 11 percent.
Copper Falls
Copper slipped to $6,633.25 a ton on the London Metal Exchange as mines in Chile, the world’s biggest producer, were returning to normal operations after the government ordered an evacuation following earthquakes. Santiago-based Codelco, the largest miner of copper, KGHM Polska Miedz SA and Pan Pacific Copper Co. said their projects escaped damage.
West Texas Intermediate crude dropped 0.2 percent to $99.43 a barrel. Rebels in eastern Libya said they were close to a deal to reopen ports, while a government report on U.S. crude stockpiles showed an unexpected drop in supplies.
Rubber futures in Tokyo slid 1.5 percent after dropping 3.3 percent yesterday. Gold rose 0.2 percent in the spot market to $1,293.38 an ounce after gaining 0.9 percent yesterday.
Bond risk fell with the Markit iTraxx Asia index of credit-default swaps dropping two basis points to 121.
Source: bloomberg
