Asian Stocks Track S&P 500 Gains; Aussie Rises as RBA Stays Put 

• Stocks rise from Sydney to Seoul as holiday closes Tokyo
• S&P 500 topped 2,100, back to pre-yuan devaluation levels

Asian stocks climbed after signs of stabilization in global manufacturing activity helped drive the Standard & Poor’s 500 Index to levels not seen since before China’s yuan devaluation in August. Australia’s dollar extended gains as the central bank held interest rates steady.

The MSCI Asia Pacific excluding Japan Index rose for the first time in six days amid signs of resilience in U.S. and European manufacturing and after measures of factory activity in China stabilized, albeit at levels denoting contraction. S&P 500 futures fluctuated after the gauge jumped 1.2 percent. The Aussie rose for a third day, while the Bloomberg-JPMorgan Asia Dollar Index was headed for its highest close in a week.

“Investors have realized the world isn’t about to end,” Shane Oliver, a Sydney-based global strategist at AMP Capital Investors Ltd., said by phone. “The rally has been partly contingent on support from central banks, with the easing in China and talk of easing in Europe. With some economic indicators improving a little bit, the RBA has put rates on hold and at the same time signaled an easing bias.”

China’s surprise currency move on Aug. 11 ignited the most volatile quarter for global markets since 2011 and led to the Federal Reserve citing the risks to global financial markets in its September decision to hold rates near zero. The focus now is firmly on central banks, with Japan and Europe indicating they’ll hold fast to stimulus amid increasing bets on the Fed raising rates before the end of 2015. Payrolls data due later this week will be key to determining the path of U.S. monetary policy.

Stocks

The MSCI Asia Pacific excluding Japan Index added 0.8 percent by 3:30 p.m. Tokyo time. Even after posting its best monthly performance since 2012 in October, the index is still about 4 percent below its closing level on Aug. 10, the day before China cut the value of the yuan. MSCI’s Asia Pacific gauge, which includes Japanese equities, is down 2.8 percent this year.

Australia’s S&P/ASX 200 Index rose 1.4 percent in Sydney, after sinking the most since Sept. 29 on Monday. The Kospi index in Seoul climbed 0.7 percent, while New Zealand’s S&P/NZX 50 Index added 0.6 percent, rising for the first time in three days and returning to a record high.

The Hang Seng China Enterprises Index climbed 1 percent after a five-day, 4.7 percent slide. The Hang Seng Index rose 1.3 percent. China’s Shanghai Composite Index fluctuated.

Standard Chartered Plc tumbled 3.6 percent in Hong Kong. The bank that gets most of its revenue from emerging markets tumbled after announcing a surprise loss, a rights issue and 15,000 job cuts.

Futures on the S&P 500 swung between gains and losses after the index closed at 2,104.05, the highest since Aug. 10. Nasdaq 100 Index futures were also little changed after the technology gauge reached a 15-year high. Contracts on London’s FTSE 100 Index added 0.5 percent.

Currencies

The Aussie climbed 0.7 percent to 71.94 U.S. cents. Seventeen of the 29 economists surveyed by Bloomberg expected the Reserve Bank of Australia to keep the benchmark rate at a record-low 2 percent Tuesday. The bank cited “moderate expansion” in the local economy and noted that previous rate cuts are helping to support lending and spending.

The Korean won climbed 0.4 percent, while the Thai baht strengthened 0.2 percent. Indonesia’s rupiah jumped 0.8 percent and the Malaysian ringgit gained 0.4 percent.

Turkey’s lira advanced 0.2 percent after Monday’s 3.2 percent surge in the wake of parliamentary elections that secured a majority for the AK Party that’s aligned with President Recep Tayyip Erdogan. Investors welcomed the end of a five-month political standoff, and the return of a government with a track record of maintaining growth, taming inflation and luring global business during 13 years in power.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, slipped 0.1 percent, heading for a fourth straight decline. The euro was little changed at $1.1018.

Bonds

Australian government bonds declined for a fourth day, with 10-year yields rising seven basis points, or 0.07 percentage point, to 2.69 percent. Rates on similar-maturity New Zealand notes gained four basis points to 3.33 percent.

Yields on Treasuries due in a decade climbed three basis points on Monday, to 2.17 percent, touching a five-week high as odds the Federal Reserve will raise key interest rates at their December meeting held at 50 percent, from 33 percent a month ago. Trading in Treasuries is delayed Tuesday due to the holiday in Japan.

Commodities

The Bloomberg Commodity Index climbed 0.2 percent. The gauge has lost 17 percent this year as slower growth in China has collided with increasing supply to send prices for raw materials and energy plunging.

Aluminum in London advanced 1.1 percent, rising for a third day, as Alcoa Inc., the largest U.S. producer of the metal, stepped up efforts to close higher-cost smelting and refining capacity as a global glut batters prices.

The New York-based company will reduce smelting capacity by 503,000 metric tons and alumina refining by 1.2 million tons, it said Monday in a statement. The measures will be completed by the end of next quarter.

Gold advanced 0.4 percent to $1,138.24, climbing from a four-week low. The metal has fallen in recent days amid speculation that the Federal Reserve will start to boost U.S. interest rates in December, with investors looking ahead to monthly payrolls data on Friday for a gauge of the economy’s strength.

Oil in New York was little changed after Monday’s 1 percent decline. U.S crude inventories probably increased by 2.25 million barrels through Oct. 30 for a sixth week of gains, according to a Bloomberg survey before an Energy Information Administration report Wednesday.

Source: Bloomberg – Asian Stocks Track S&P 500 Gains; Aussie Rises as RBA Stays Put

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