Hong Kong: Asian stocks edged for the first time in four days because energy shares rebounded from the lowest level in more than five years and China’s markets rallied amid speculation for further easing.
Inpex Corp., an oil explorer, climbed 3.2 percent in Tokyo. China Minsheng Banking Corp. jumped 10 percent in Shanghai as mainland financial shares jumped. Haitong Securities Ping An Insurance (Group) Co. surged 6.1 percent in Hong Kong after people with knowledge of the matter said Jack Ma, the billionaire founder of Alibaba Group, agreed to invest in the company.
The MSCI Asia Pacific Index (MXAP) rose 0.3 percent to 140.17 as of 4:35 p.m. in Hong Kong. The equity gauge’s energy group gained 1.2 percent as West Texas Intermediate crude rebounded overnight after posting the biggest monthly loss in almost six years in November after OPEC signaled it would take no action to ease a global glut.
“The fall in oil prices will boost economic activity, and allow the Federal Reserve a greater degree of freedom to remain accommodative as growth accelerates,” said Dominic Rossi, London-based chief investment officer for equities at Fidelity International Ltd., which manages about $308 billion. “Our conviction in this equity bull market, led by the U.S. and the developed world, continues.”
The Shanghai Composite Index jumped 3.1 percent to a three-year high. Hong Kong’s Hang Seng Index added 1.2 percent, while a gauge of mainland shares surged 2.8 percent.
Chinese financial shares advanced on falling money-market rates as the People’s Bank of China refrained from draining liquidity from the financial system for a second week. Data yesterday showing slower factory activity boosted bets that last month’s surprise cut in interest rates will be paired with a reduction in lenders’ reserve requirements.
Japan’s Topix index climbed 0.4 percent as the yen weakened 0.4 percent to 118.89 per dollar and a gauge of energy explorers climbed 2.9 percent. Shares advanced even after Moody’s Investors Service yesterday reduced its rating on the nation’s economy one level to A1, citing uncertainty over whether Japan will achieve its deficit-reduction goals and succeed in boosting growth.
Australia’s S&P/ASX 200 Index (AS51) gained 1.4 percent. New Zealand’s NZX 50 Index and South Korea’s Kospi index were little changed. Singapore’s Straits Times Index advanced 0.6 percent.
Meanwhile, Tokyo stocks rose 0.42 percent Tuesday to close at a fresh seven-year high, casting off early losses as investors remained upbeat despite Moody’s downgrade of Japan’s credit rating and five commercial banks. The Nikkei 225 index at the Tokyo Stock Exchange added 73.12 points to end at 17,663.22, its best close since mid-2007, while the Topix index of all first-section shares rose 0.44 percent, or 6.20 points, to 1,427.85.
Shares opened soft on profit taking after recent rallies and a fall on Wall Street, but the Nikkei crept into the positive territory in the afternoon, with investors remaining bullish thanks to the Bank of Japan’s ultra-easy money policy driving down the yen. Ryota Sakagami, chief equity strategist at SMBC Nikko Securities, said the Nikkei could hit 20,000 next year if Japanese companies revise up their third- and fourth-quarter earning projections.
On forex markets, the dollar bought 118.61 yen against 118.40 yen in New York. The dollar briefly topped the 119 yen level on Monday after Moody’s downgraded Japan’s sovereign debt rating by one notch, citing the country’s massive national debt and a decision to a delay a sales tax hike next year. It downgraded five Japanese commercial banks on Tuesday.
But the brokers said the credit rating cut would have limited on traders’ outlook. “Little of Japan’s debt is held by foreigners, so unless there is a surprise upward impact on interest rates, the picture for equity investing should not be harmed much,” said Shunichi Otsuka, general manager of research and strategy at Ichiyoshi Asset Management.
Investors were also eyeing domestic politics as official campaigning kicked off in Japan on Tuesday ahead of a December 14 national poll that Prime Minister Shinzo Abe has described as a referendum on his economic growth strategy.
In Tokyo, battery maker GS Yuasa’s shares fell 2.46 percent to 555.0 yen after US investigators said the 2013 grounding of a Boeing 787 was due to a defect in its battery that was poorly addressed by manufacturers and regulators. GS Yuasa supplies battery packs for the 787 Dreamliner.
Toyota added 1.32 percent to end at 7,527.0, Panasonic rose 0.58 percent to 1,563.0 yen and mobile carrier SoftBank fell 1.58 percent to 7,840.0 while Sony lost 0.63 percent to end at 2,623.5 yen.
Mitsubishi UFJ shed 0.20 percent to finish at 688.6 yen after Moody’s cut its credit rating on five Japanese commercial banks Tuesday, including the country’s biggest lender.