By Emma O’Brien and Nick Gentle Oct 22, 2014 4:21 PM GMT+1300
Asian stocks rose while credit risk in the region retreated to a three-week low after U.S. shares jumped the most in a year. Australian bonds pared a decline as inflation slowed more than estimated.
The MSCI Asia Pacific Index climbed 1.1 percent by 12:20 p.m. in Tokyo, as Japan’s Topix index added 1.8 percent and the Hang Seng Index increased 1.1 percent. Standard & Poor’s 500 Index futures lost 0.1 percent after the U.S. gauge surged 2 percent, led by Apple (AAPL) Inc. The Markit iTraxx Asia index of credit-default swap prices fell for a fourth day. Yields on Australia’s 10-year bonds climbed five basis points after rising as much as nine. Gold traded near a six-week high on Diwali festival demand.
Boeing Co., Simon Property Group Inc. and Xerox Corp. are among companies reporting earnings today after Apple’s forecast of record holiday sales drove the biggest gain in the Nasdaq 100 Index since January 2013. The European Central Bank bought Italian debt yesterday, people familiar with the matter said. Core price growth in Australia slowed more than economists projected last quarter, with U.S. inflation data due today ahead of worldwide preliminary factory reports tomorrow.
“The bottom line is Japan and the ECB will fill the gap filled by the Fed,” Shane Oliver, head of investment strategy at AMP Capital Investors Ltd., which has more than $136 billion under management, said by phone from Sydney. “It looks to me like a typical correction market. Sentiment gets pushed to a negative extreme, markets become undervalued again and smart investors find opportunities to buy back in.”
Technology companies were the three biggest supports for the Asia-Pacific (MXAP) stock gauge today after Apple’s sale projection and as Yahoo Inc. reported earnings that beat analyst estimates.
Taiwan Semiconductor Manufacturing Co. gained 2.4 percent, Tencent Holdings Ltd., operator of China’s biggest messaging service, increased 2.9 percent and Samsung Electronics Co. (005930) rose 1.6 percent.
Hong Kong shares climbed for a fourth day. The MSCI Hong Kong Index rallied 3.1 percent in October through yesterday, the most among 23 developed markets tracked by MSCI Inc. and one of only two to gain.
A gauge of Chinese shares listed in Hong Kong advanced 1.5 percent, heading for the highest close in two weeks, while the Shanghai Composite Index advanced 0.5 percent. China’s benchmark money-market rate fell for a sixth day, signaling fund injections by the central bank have boosted cash in the financial system.
China’s economy remained in a “reasonable range” in the first three quarters of this year, the central government’s website cited Premier Li Keqiang as saying at an APEC finance ministers meeting.
Japan’s Topix gained 4.3 percent this week after falling 5.3 percent last week. The measure is still down more than 7 percent for the month. The Nikkei 225 Stock Average climbed 1.7 percent today.
The S&P 500 climbed the most since Oct. 13 last year as Apple climbed a third day and investors speculated the ECB would increase its stimulus program. The Dow Jones Industrial Average advanced 1.3 percent and the Nasdaq 100 surged 2.6 percent, the most since January 2013, as about 7.2 billion shares traded hands.
Yahoo shares rose as much as 4.8 percent in extended trading, after closing at $40.17 in New York. The stock is down less than 1 percent this year, compared with a 5 percent gain in the Standard & Poor’s 500 Index. For the third quarter, profit, excluding items such as stock-based compensation, was 52 cents a share. Analysts had projected 30 cents.
The Stoxx Europe 600 Index jumped 2.1 percent for only its second advance in 11 days. The ECB bought Italian covered bonds as it returned to the market for a second day under its asset purchase program, according to two people familiar with the move who asked not to be identified because the information is private.
The ECB could make a decision on adding corporate bond purchases to its easing measures as soon as December, Reuters reported, citing several unidentified people. A spokesman for the central bank told Reuters “the Governing Council has taken no such decision.”