Asian stocks rose for a fourth week in five, driving the MSCI Asia-Pacific Index to the highest level in eight months, as US consumer confidence and Japanese production reports spurred hopes for a global economic recovery.
Toyota Motor Corp, which gets 31 percent of its revenue in North America, gained 6.7 percent in Tokyo. PetroChina Co, the nation’s biggest oil producer, advanced 6 percent as crude oil prices surged for a second week. Hang Lung Properties Ltd, Hong Kong’s fifth-biggest builder, surged 16 percent after Hong Kong’s government announced an additional stimulus package.
“Signs of a turnaround are coming through,” said Matt Riordan, who helps manage about US$3.1 billion at Paradice Investment Management in Sydney. “People who were initially dismissing this as a bear-market rally are concerned it might be sustainable.”
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The MSCI Asia-Pacific Index gained 2.7 percent to 102.04, its highest level since Oct. 3. The gauge, which has rallied 45 percent from a five-year low on March 9, briefly pared gains this week after North Korea threatened a military strike in response to South Korea joining a program to seize weapons shipments.
South Korea’s KOSPI Index sank 0.6 percent as North Korea tested a nuclear device on May 25 and launched six short-range missiles in defiance of international condemnation.
“The North Korean missile test is providing investors a reality check,” said Roger Groebli, Singapore-based head of market analysis at LGT Capital Management, which oversees about US$20 billion. “Valuations in Asia are a little rich.”
Taiwanese share prices are expected to challenge the key 7,000-point level next week on continued inflows of foreign funds, dealers said.
Foreign institutional investors are likely to pick up financial heavyweights as their holdings remain relatively low and they need further short covering, they said.
However, as the bellwether electronic sector is scheduled to report sales data for this month, cautious sentiment toward high-tech stocks may cast a shadow over the broader market, the dealers added.
While the ample liquidity is expected to push the index through 7,000 or even higher next week, stiff technical resistance is likely to follow and drag it to around 6,600, they said.
In the holiday-shortened week to Wednesday, the weighted index rose 153.15 points, or 2.27 percent, to 6,890.44 after a 3.82 percent increase a week earlier.
Average daily turnover stood at NT$204.64 billion (US$6.28 billion), compared with NT$189.36 billion a week ago.
The market was closed on Thursday and Friday for the prolonged Dragon Boat Festival holiday.
Other regional markets on Friday:
HONG KONG: Up 1.60 percent. The Hang Seng Index rose 285.73 points at 18,171.00, its highest close since early October. Dealers said profit-taking pressure was strong as the local benchmark index has risen 17 percent since the start of May.
SYDNEY: Up 1.7 percent. The S&P/ASX 200 rose 62.2 points to 3,817.9. The market was “remarkably strong” and buoyed by gains in Commonwealth Bank, ANZ and Westpac after a positive lead from Wall Street, Ord Minnett private client adviser Jon Hancock said.
SEOUL: UP 0.27 percent. The KOSPI ended up 3.72 points at 1,395.89. Foreign buying outweighed concerns over instability on the Korean peninsula.
KUALA LUMPUR: Up 0.28 percent. The Kuala Lumpur Composite Index added 2.87 points at 1,044.11.
MANILA: Up 1.48 percent. The composite index rose 34.94 points to 2,389.31.
MUMBAI: Up 2.3 percent. The 30-share SENSEX rose 329.24 points to 14,625.25, a near nine-month high. Sentiment was lifted after the government said the economy grew by a better-than-expected 6.7 percent in the past fiscal year, dealers said.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
COORDINATION, ASSURANCE: Separately, representatives reintroduced a bill that asks the state department to review guidelines on how the US engages with Taiwan US senators on Tuesday introduced the Taiwan travel and tourism coordination act, which they said would bolster bilateral travel and cooperation. The bill, proposed by US senators Marsha Blackburn and Brian Schatz, seeks to establish “robust security screenings for those traveling to the US from Asia, open new markets for American industry, and strengthen the economic partnership between the US and Taiwan,” they said in a statement. “Travel and tourism play a crucial role in a nation’s economic security,” but Taiwan faces “pressure and coercion from the Chinese Communist Party [CCP]” in this sector, the statement said. As Taiwan is a “vital trading
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