JP:Asian Stocks Climb With Aussie, Copper as Silver Advances
Asian stocks rose, with the regional benchmark index extending its first weekly advance this year, and Australia’s dollar climbed with copper after record lending boosted prospects for growth in China. Gold and silver gained, while the US currency weakened a third day versus major peers.
The MSCI Asia Pacific Index rose 0.7 percent by 1:12 p.m. in Tokyo, adding to last week’s 1.6 percent gain. The Aussie gained against most major peers while Indonesia’s rupiah strengthened 1.2 percent to its highest versus the greenback since November. Copper advanced 0.7 percent, while gold and silver increased at least 0.6 percent. Standard & Poor’s 500 Index futures were little changed, with US markets shut for President’s Day.
Record new credit in China in January may help Asia’s largest economy maintain momentum amid government efforts to rein in risky lending. Hedge funds have raised bullish gold bets to a three-month high as disappointing US economic data boosted haven demand, while John Paulson maintained bullion holdings. A report today showed economic growth in Japan unexpectedly slowed last quarter, after data last week showed US factory production missed estimates.
“The money and credit data have reinforced the sense that China’s not on the verge of collapsing and that’s always a positive,” Tim Condon, Singapore-based head of Asian research at ING Groep NV, said in a telephone interview. “The US ended on a high note last week, it was a good week last week in Asia and I think that’s continuing today. The feel-good factor has got some legs now, so for investors it’s make hay while the sun shines.”
China lending
More than two stocks rose for each that fell on MSCI’s Asia-Pacific gauge. Hong Kong’s Hang Seng Index gained 0.9 percent, and the Hang Seng China Enterprises Index of mainland equities increased 1.6 percent. The Shanghai Composite Index climbed 0.5 percent.
Aggregate financing, the broadest measure of credit, was 2.58 trillion yuan ($425 billion), the People’s Bank of China said in a Feb. 15 statement. New local-currency lending was 1.32 trillion yuan, the highest level since 2010. Trust loans, under scrutiny because of default risks, were about half the level of a year earlier.
China’s seven-day repurchase rate, a gauge of funding availability in the banking system, dropped to 3.87 percent, the lowest since Nov. 13.
“Everyone was worried about growth slowing down sharply because credit is going to be reined in.” Vasu Menon, vice-president for wealth management at Oversea-Chinese Banking Corp. in Singapore, said by phone today. “Concerns about growth have taken a slight backseat. In the short term, what’s happening in the credit front is also beneficial to the commodity space.”
Dollar weakness
The so-called Aussie rose 0.3 percent to 90.58 US cents, leading gains among developed-market currencies. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, fell as much as 0.2 percent to 1,015.57, the lowest level since Dec. 18 and extending two weeks of decline.
Indonesia’s rupiah climbed to 11,678 per dollar, the highest since Nov. 20. South Korea’s won gained 0.2 percent to 1,060.83 per dollar, after reaching 1,058.45 earlier, the strongest since Jan. 14, as signs that a selloff in emerging markets is abating boosted demand for riskier assets. Malaysia’s ringgit and the Philippines peso each added 0.4 percent.
The yen strengthened 0.2 percent in a fourth day of gains, rising as high as 101.39 a dollar. Japan’s Topix rose 0.5 percent, reversing a 1 percent decline.
BOJ meeting
Growth in Japanese gross domestic product slackened to 1 percent last quarter on an annualized basis, from 1.1 percent in the previous period and below the 2.8 percent estimated by economists in a Bloomberg survey. The country also reports December industrial production today and the Bank of Japan is forecast to leave monetary policy unchanged after a meeting that concludes tomorrow.
US factory production unexpectedly declined in January by the most since May 2009, according to a report released on Feb. 14, adding to evidence severe winter weather is weighing on the economy.
