Asian stocks post first advance this week on stimulus outlook

Asian stocks climbed for the first day this week amid speculation central banks will provide additional stimulus to bolster global economic growth.

The MSCI Asia Pacific Index gained 0.5 percent to 125.57 as of 8:01 p.m. in Hong Kong, halting three days of losses. U.S. shares rebounded with crude oil on Wednesday ahead of Thursday’s European Central Bank meeting that may provide more insight on the potential for further steps to loosen policy and the trajectory of interest rates. The Reserve Bank of New Zealand unexpectedly cut interest rates to a fresh record low and signaled further easing may be needed, saying it’s concerned by a slump in inflation expectations.

“There’s very strong expectation that we’re going to see further stimulus from the ECB, and the real question is how strong that stimulus will be,” Chris Green, an Auckland-based strategist at First NZ Capital Group Ltd., a brokerage and wealth management firm, said by phone. “We’re seeing a more supportive environment for risk assets going forward.”

New Zealand’s S&P/NZX 50 Index jumped 0.8 percent to a record close. Reserve Bank Governor Graeme Wheeler lowered the official cash rate by a quarter point to 2.25 percent, a move predicted by just two of 17 economists surveyed by Bloomberg.

The ECB is forecast to ease policy via measures including an interest-rate cut and an expansion of its quantitative easing, according to economists surveyed by Bloomberg. That would add to a wave of global monetary stimulus this year that includes a lowering of Chinese lenders’ reserve requirements and Japan’s introduction of a negative interest rate. The Bank of Japan and Federal Reserve will each hold their policy meetings next week.

Regional Gauges

Japan’s Topix index climbed 1.5 percent as the weaker yen buoyed exporters including Sony Corp. and Toyota Motor Corp. The gauge fell 3.1 percent over the previous three sessions.

South Korea’s Kospi index rose 0.8 percent after the nation’s central bank held the benchmark interest rate at a record low. Hong Kong’s Hang Seng Index slipped 0.1 percent. Taiwan’s Taiex added 0.3 percent. Singapore’s Straits Times Index was down less than 0.1 percent. Australia’s S&P/ASX 200 Index finished 0.1 percent lower, erasing gains of as much as 0.4 percent earlier.

China’s Shanghai Composite Index dropped 2 percent, capping its biggest two-day decline in a month, as property developers slumped amid concern the government will impose measures to cool the real estate market. Mainland consumer prices rose the most since mid-2014 in February as food costs jumped amid the week-long Lunar New Year holidays.

Nuclear Injunction

NCSoft Corp. jumped 10 percent in Seoul as the company’s new mobile game app became popular in China. Golden Agri-Resources Ltd. rallied 6.6 percent in Singapore, pacing gains among palm oil producers as the raw-material climbed to a two-week high. Kansai Electric Power Co. tumbled 15 percent in Tokyo, the most since 1987, after a Japanese court issued an injunction preventing the utility from operating two of its nuclear reactors due to safety concerns.

E-mini futures on the Standard & Poor’s 500 Index increased 0.3 percent. The underlying U.S. equity benchmark added 0.5 percent on Wednesday as energy companies advanced as oil rallied. West Texas Intermediate crude for April delivery fell as much as 1.4 percent after surging 4.9 percent to a three-month high on Wednesday.

(Bloomberg)