Asian stocks rose this week, sending the benchmark index to its biggest two-week climb since January last year, after Tokyo was chosen to host the 2020 Olympics and as data showed China’s economy is picking up. The rally reversed course on Friday ahead of a US Federal Reserve meeting next week.
Taisei Corp, a Japanese building contractor expected to benefit from the Olympics, jumped 24 percent since Sept. 6 in Tokyo.
BYD Co (比亞迪) gained 13 percent in Hong Kong on a report that the automaker is developing an electric vehicle to challenge Tesla Motors Inc after China’s Hebei Provincial Government said it is seeking to increase sales of new energy vehicles. BYD is aiming to make a car that can accelerate to 99kph in 3.9 seconds, Sina.com reported, citing founder Wang Chuanfu (王傳福)
In Mumbai, Wockhardt Ltd, a maker of insulin and hepatitis vaccines, soared 28 percent after Avanir Pharmaceuticals Inc settled patent litigation over a drug.
The MSCI Asia Pacific Index rose 2.5 percent to 137.09 this week, taking its climb since Aug. 30 to 5.3 percent as China reported better-than-estimated exports and industrial production data. Shares declined on Friday as investors weighed diplomatic negotiations seeking to avert a US military strike on Syria and the Fed’s meeting.
Investors already anticipate a reduction of the US central bank’s US$85 billion in monthly bond purchases and do not expect a sudden change in markets if it occurs, according to 57 percent of respondents in a Bloomberg Global Poll.
Asia’s benchmark index was valued at 13.4 times estimated earnings on Thursday, compared with multiples of about 15.2 for the Standard & Poor’s 500 Index and 14.2 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
In Taipei, the TAIEX rose 0.1 percent this week to close at 8,168.2 on Friday compared with 8,164.20 on Sept. 6.
Hon Hai Precision Industry Co Ltd (鴻海精密) rose 0.27 percent to NT$75, while Taiwan Semiconductor Manufacturing Co (台積電) slipped 0.97 percent to NT$102.5.
In an extraordinary trading session yesterday, the TAIEX shed 0.31 percent to end at 8,142.48.
With foreign traders sidelined for the weekend, turnover in the market fell sharply. Market sentiment remained cautious, prompting many traders to sit idle throughout the session awaiting a conclusion from the Fed meeting, dealers said.
The market expects the Fed to decide to tighten liquidity in the meeting, but many investors remained wary of how the US central bank will do this, they added.
In Japan, the TOPIX climbed 3.3 percent this week after Tokyo won the rights to host the 2020 Olympics. Taisei jumped 24 percent to ￥506, while Hitachi Construction Machinery Co gained 18 percent to ￥2,384. General contractor Tokyu Construction Co led the TOPIX higher this week as its shares more than doubled. The Nikkei 225 Stock Average climbed 3.9 percent.
Hong Kong’s Hang Seng Index rose 1.3 percent this week, erasing this year’s losses, while the Hang Seng China Enterprises Index, also known as the H-share index, entered a bull market after rising more than 20 percent from its June low.
China’s Shanghai Composite Index jumped 4.5 percent as data showed the nation’s inflation remained subdued last month, while other economic reports beat expectations. Exports rose 7.2 percent from a year earlier last month, exceeding the 5.5 percent median estimate, as retail sales climbed 13.4 percent and the broadest measure of new credit almost doubled.
In South Korea, the KOSPI gained 2 percent this week as the Bank of Korea held its key interest rate steady, while Singapore’s Straits Times Index climbed 2.4 percent and Australia’s S&P/ASX 200 Index gained 1.5 percent, reaching its highest level in more than five years after the Liberal-National coalition won last weekend’s election.
In other markets on Friday:
Wellington added 0.20 percent, or 9.45 points, from Thursday to end at 4,650.94.
Manila retreated 1 percent, or 62.37 points, to close on 6,133.24.
Mumbai fell 0.25 percent, or 49.12 points, to 19,732.76 points.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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