Asian stocks rose this week as concerns over Europe’s debt crisis eased after China reaffirmed its support, boosting the global economic outlook and commodity prices.
Rio Tinto Group, the world’s third-largest mining company, surged 10 percent in Sydney as concern eased that a proposed Australian mining tax will cut earnings. Fortescue Metals Group Ltd, Australia’s third-largest iron-ore producer, soared 13 percent. Poly (Hong Kong) Investment Ltd, a Chinese property developer, rallied 15 percent on speculation the nation will delay further measures to cool its property market due to Europe’s debt crisis.
“The market has priced in all the bad news for now,” said Ayako Sera, a strategist at Tokyo-based Sumitomo Trust & Banking Co, which manages the equivalent of US$307 billion. “Stocks are undervalued, assuming Europe’s problems won’t spill over and cripple the global economy.”
The MSCI Asia-Pacific Index climbed 1.3 percent to 113.56 this week amid speculation stock declines since last month had more than reflected European debt concerns.
Gauges tracking material and energy stocks on the MSCI Asia-Pacific Index climbed more than 3 percent, the biggest gains among its 10 industry groups.
China’s Shanghai Composite Index advanced 2.8 percent, and Hong Kong’s Hang Seng Index gained 1.1 percent. Japan’s Nikkei 225 Stock Average slipped 0.2 percent. South Korea’s KOSPI Index rose 1.4 percent and Australia’s S&P/ASX 200 Index climbed 3.5 percent.
The MSCI Asia-Pacific Index has declined 12 percent from this year’s high on April 15 on concern some European countries will be unable to repay their debt, even after the region’s leaders unveiled a bailout plan worth almost US$1 trillion.
Taiwanese shares closed up 0.72 percent on Friday on buying triggered by a strong overnight rebound on Wall Street that pushed the Dow Jones Industrial Average over the key 10,000-point level again, dealers said.
The TAIEX closed up 52.16 points at 7,295.32, after moving between 7,271.30 and 7,364.01, on turnover of NT$101.71 billion (US$3.17 billion).
The market opened up 1.32 percent as investors took their cues from the Wall Street gains, but profit-taking emerged during the trading session that compromised the earlier gains, with the index approaching the nearest technical resistance at around 7,400 points, the dealers said.
Friday marked the market’s third consecutive day of gains after a 3.23 percent dive on Tuesday to an eight-month low.
“Investor sentiment has improved since the recovery in the last three sessions. It seems that the market has managed to regain some stability after the recent heavy losses, “ TLG Asset Management (台壽保投信) analyst Arch Shih (施博元) said.
“The profit-taking seen during the trading session was just a technical reaction and a trend toward further rebounds remains in place,” Shih said.
The market is expected to challenge the 7,500-point level starting from Tuesday, as investors have embraced high hopes about the high-tech sector’s sales reports for this month, Shih said.
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