Asian stocks rebounded, with the regional benchmark rising from the lowest level in almost a month, led by advances in China, Taiwan and Australia. Treasuries gained and the Australian dollar strengthened. The MSCI Asia Pacific Index rallied 1.2 percent to 113.25 at 4:03 p.m. in Tokyo, gaining for a second day. The Stoxx Europe 600 increased 0.6 percent to 238.07. Standard & Poor’s 500 Index futures rose 0.2 percent before market trading resumes in the U.S. following a holiday. Australia’s dollar advanced 0.8 percent after the central bank said consumer spending and business investment are set to expand. Yields on 10-year Treasuries fell 4 basis points to 2.94 percent. The MSCI Asia index sank 3.4 percent last week. The decline was the most since the period ended May 21 and took the average price of its companies to 13.6 times estimated profit, the lowest level since December 2008. The Shanghai Composite Index gained 1.9 percent before the pricing of Agricultural Bank of China Ltd.’s share sale in what may be the world’s largest IPO. “Valuations have become attractive and bargain hunting is pushing the market higher,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which holds $90 billion. “I doubt this is durable. Until we get more clarity on whether we will get a double dip in the economy, markets are likely to remain volatile.” About seven shares rose for every two that declined in the MSCI Asia index. Japan’s Nikkei 225 Stock Average gained 0.8 percent. Taiwan’s Taiex climbed 1.5 percent. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, advanced 2.6 percent. HTC Corp., the maker of Google Inc.’s Nexus One cell phone, jumped 5 percent. Share Sale The Shanghai Composite Index rallied today from a 15-month low, while the Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong gained 0.8 percent after completing its longest losing streak since 1996. Agricultural Bank, China’s largest by number of customers, is selling as much as $20.1 billion of stock in Shanghai and Hong Kong. The underwriters may set a price for the shares today, two people with knowledge of the matter said. Commonwealth Bank of Australia, the country’s largest bank by market value, increased 2.2 percent after the nation’s central bank left its benchmark interest rate unchanged for the second straight month, as expected by economists. Mideast Markets Kuwait shares gained 0.6 percent, snapping a four-day drop and leading Gulf markets higher. Construction company Mabanee Co. surged 7.1 percent, poised for the biggest increase in almost a year. HSBC Holdings Plc initiated coverage on the shares yesterday with an “overweight” recommendation. The Bloomberg GCC 200 Index of stocks in the Gulf region climbed 0.2 percent. The Australian dollar rose against all 16 major counterparts after policy makers led by Governor Glenn Stevens kept the overnight cash rate target at 4.5 percent, the Reserve Bank of Australia said in a statement in Sydney today. Australia’s currency advanced 0.8 percent to 84.54 U.S. cents, having slumped 0.9 percent earlier. “With the high level of the terms of trade expected to add to incomes and demand, output growth in Australia over the year ahead is likely to be about trend,” Stevens said. “The market had built in a bit more bearishness than the RBA delivered,” said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. “They don’t seem as concerned about the global economy as the market and that should support the Aussie dollar.” Copper advanced for a third day amid confidence in the global recovery as demand for the industrial metal reduced inventories tracked by the London Metal Exchange to 444,500 tons yesterday, the lowest level since Dec. 2. Three-month delivery copper added 0.6 percent to $6,506 a metric ton. Treasuries rose, pushing yields toward the lowest levels this year. Ten-year yields, a benchmark for mortgage rates and company borrowing costs, fell 4 basis points to 2.94 percent in Tokyo, according to data compiled by Bloomberg. The 3.5 percent security due in May 2020 rose 10/32, or $3.13 per $1,000 face amount, to 104 3/4. The yield declined to 2.8793 percent on July 1, the least since April 2009. To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

Source