Asian stocks posted the biggest weekly gain in seven months as concern eased that losses from Dubai World’s possible default will batter lenders and after the Bank of Japan stepped up its effort to fight deflation.
Commonwealth Bank of Australia and National Australia Bank Ltd both climbed at least 4 percent after saying they didn’t expect “material” losses from Dubai. Toyota Motor Corp, the world’s largest carmaker, which gets 31 percent of revenue in North America, soared 13 percent after the US dollar rose from a 14-year low last week. Mitsubishi Motors Corp rocketed 26 percent after PSA Peugeot Citroen said it was in talks with the Japanese carmaker on expanding their partnership.
“There is relief that things are not as serious as they might be,” said Matt Riordan, who helps manage about US$5.1 billion at Paradice Investment Management in Sydney. “The risk of a serious contagion affecting the global financial system doesn’t now seem likely or probable.”
The MSCI Asia-Pacific Index jumped 5.5 percent this week to 120.14, the sharpest weekly advance since the period ended May 8. The index has rallied 72 percent from a five-year low on March 9 as government stimulus spending revived global demand.
Japan’s TOPIX index soared 9.7 percent, the most since August 1992, with a gauge of carmakers surging 14 percent. Australia’s S&P/ASX 200 Index advanced 2.9 percent.
The Shanghai Composite Index added 7.1 percent, while Hong Kong’s Hang Seng Index rose 6.5 percent after the government pledged to maintain stimulus policies next year.
The gathering pace of growth is a legacy of more than US$2 trillion of stimulus since September last year and interest-rate cuts from governments around the world. Stocks in the MSCI Asia-Pacific Index trade at 22 times estimated earnings for this year, compared with 17 times for the Standard & Poor’s 500 Index and 16 times for Europe’s Dow Jones STOXX 600 Index in Europe.
Dubai World, the state holding company, will ask creditors for a “standstill” agreement as it negotiates to extend debt maturities, Dubai’s Department of Finance said on Nov. 25.
Taiwanese share prices are expected to suffer a downturn next week as investors pocket profits made this week, dealers said on Friday.
After local elections are held at the weekend, the market may test 7,500 points during the week and even fall below that level, as the government has not taken steps to bolster the market in order to woo voters, they said.
Looking beyond Taiwan’s borders investors will closely monitor monthly US job data to get a sense of the global climate, they said.
Despite weak sentiment, the market may stage a rebound at 7,500 points, but is expected to see a cap at 7,800 points next week, dealers said.
For the week to Friday, the weighted index rose 160.00 points, or 2.14 percent, to 7,650.91 after a 2.5 percent fall a week earlier.
Average daily turnover stood at NT$115.48 billion (US$3.59 billion), compared with NT$120.85 billion a week ago.
“Turnover fell despite gains in share prices this week, indicating a cautious mood over the short-term prospects,” TLG Asset Management analyst Arch Shih said.
Shih said selling may focus on financial heavyweights, now featuring high valuations after buying was encouraged by acquisition speculations.
Other markets on Friday:
SEOUL: Up 0.60 percent from Thursday. The KOSPI gained 9.76 points at 1,624.76.
SINGAPORE: Down 0.61 percent from Thursday. The Straits Times Index dropped 17.17 points to 2,791.01.
BANGKOK: Down 0.74 percent from Thursday. The Stock Exchange of Thailand (SET) composite index fell 5.26 points to close at 701.58.
KUALA LUMPUR: Down 0.17 percent from Thursday. The Kuala Lumpur Composite Index lost 2.15 points to 1,270.20.
JAKARTA: Up 0.46 percent from Thursday. The Jakarta Composite Index gained 11.51 points to 2,511.54.
MANILA: Down 0.94 percent from Thursday. The composite index lost 28.92 points to 3,061.99. The government’s announcement that Philippine inflation crept up to a six-month high of 2.8 percent last month made no impact on the market, analysts said.
WELLINGTON: Down 0.24 percent from Thursday. The NZX-50 index fell 7.47 points to 3,146.46.
MUMBAI: Down 0.49 percent from Thursday. The 30-share SENSEX index closed down 84.14 points at 17,101.54.
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