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Sydney - Asian stocks jumped, resuming this week’s rally after oil rebounded along with equities in Hong Kong and Japan.
The MSCI Asia Pacific Index jumped 2.1% to 120.16 as of 10:06, with commodity companies leading gains. The Standard & Poor’s 500 Index rose for a third day as the Federal Reserve hinted it may be expecting a slower pace of interest-rate increases this year.
Oil climbed above $31 a barrel after Iran supported a proposal by Saudi Arabia and Russia to freeze production at near-record levels, without saying whether it would curb its own output.
“The Fed minutes show that it does look like they’re gearing up for a slower rate hike path, which is good” for risk assets, said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors, which oversees about $115bn. “I think this rally has further to go, with the conditions set for the rebound to continue for a little while. Pessimism had got to extreme levels.”
The regional benchmark gauge is up 6.4% over four days, heading for its best week since 2011 after sinking to a three-and-a-half-year low on Friday amid concern about the growth outlook for the world’s largest economies and the rout in oil.
The Topix index gained 2.3%, wiping out Wednesday’s losses. Japanese stocks are up almost 10% this week, including an 8% surge on Monday, as investors speculate losses that sent global equities into a bear market last week were overdone and amid optimism central banks will support financial markets. Still, the index remains 15% lower this year. The yen traded at 113.77 per dollar.
Japan stimulus
Japan’s Prime Minister Shinzo Abe plans to keep stimulus measures off the table for now, the Nikkei newspaper reported. This comes as the Bank of Japan starts to charge some lenders’ deposits at the central bank, part of its unprecedented monetary easing program that’s run since Abe came to power in 2012.
Sharp rose 6.4%. Lawyers for the consumer- electronics maker are recommending that two board members be excluded from a final vote on competing bailout plans, possibly tipping the balance in favor of a proposal from Innovation Network of Japan, people with knowledge of the matter said.
The Hang Seng Index climbed 2.3%, and the Hang Seng China Enterprises Index gained 3% to the highest in two weeks. Lower valuations have spurred fund managers including Mark Mobius to say this week that they see bargains after the H- shares gauge plunged more than 40% from its May high.
The Shanghai Composite Index slipped 0.1%, dropping for the first time in three days after data showed inflation picked up in January on rising food prices.
Australia’s S&P/ASX 200 Index climbed 2.3% and New Zealand’s S&P/NZX 50 Index rose 0.4%. Singapore’s Straits Times Index advanced 1.9% and South Korea’s Kospi index advanced 1.3%.
US futures
Futures on the S&P 500 were little changed. The underlying measure jumped 1.7% on Wednesday as the year’s most-battered shares continued to recover and energy shares climbed. Minutes from the January Federal Open Market Committee meeting showed that officials were worried about a series of drags and disruptions, signaling they may step back from a December projection of four rate increases this year.
Crude oil jumped for a second day, with West Texas Intermediate advancing 1.9% after a 5.6% surge on Wednesday.
“The storm is blowing over and markets are stabilizing," said Mitsushige Akino, executive officer at Ichiyoshi Asset Management in Tokyo. “Declines in oil had been weighing on risk sentiment, so it’s a positive sign that prices are rebounding."
