Asian stocks rose, with a regional gauge posting its biggest gain this month, as China’s unexpected interest-rate cuts stoked optimism in the global economy.
BHP Billiton Ltd. (BHP), the world’s biggest mining company that gets about 35 percent of revenue from China, jumped 3.8 percent in Sydney. China Vanke Co., the nation’s biggest homebuilder by sales, surged 13 percent in Hong Kong, pacing gains among mainland developers. Halla Visteon Climate Control Corp. led declines on the Asian benchmark gauge after reports that South Korean buyout fund Hahn & Co. is considering purchasing shares in the company from U.S. auto-parts maker Visteon Corp.
The MSCI Asia Pacific excluding Japan Index climbed 1.3 percent to 573.27 as of 7:28 p.m. in Hong Kong, its biggest advance since Oct. 29. China reduced interest rates last week, joining the European Central Bank and the Bank of Japan in deploying fresh stimulus. That contrasts with the Federal Reserve, which has ended its bond-buying program as the U.S. economystrengthens. ECB President Mario Draghi said Nov. 21 he will do what is necessary to spur inflation.
“The rally in Chinese shares will continue following the rate cut,” Nader Naeimi, who helps manage about $125 billion as head of dynamic asset allocation at AMP Capital Investors Ltd. in Sydney, said by phone. “Central banks can be aggressive in cutting rates because inflation isn’t an issue. We have been getting surprises from central banks. There’s a good chance we’ll see a move from the ECB soon.”
China’s Shanghai Composite Index (SHCOMP) climbed 1.9 percent to its highest close since September 2011, while the Hang Seng China Enterprises Index of mainland shares traded in city surged 3.8 percent, the biggest advance in a year. The benchmark Hang Seng Index rose 2 percent.
China cut benchmark interest rates for the first time since July 2012 as leaders step up support for the world’s second-largest economy. The one-year lending rate was reduced by 0.4 percentage point to 5.6 percent, while the one-year deposit rate was lowered by 0.25 percentage point to 2.75 percent, the People’s Bank of China said on its website on Nov. 21.
“Stimulus has been the magic fix for equity markets over the past six years and the mere sign it will eventuate is enough to be championed by the markets,” Evan Lucas, a market strategist at IG Ltd. Melbourne, wrote in a note to clients. “We now have three of the four largest central banks in the world actively stimulating their respective domestic economies.”
South Korea’s Kospi index gained 0.7 percent and Australia’s S&P/ASX 200 Index jumped 1.1 percent. Taiwan’s Taiex index rose 0.3 percent, while Singapore’s Straits Times Index lost 0.1 percent. New Zealand’s NZX 50 Index fell 0.4 percent. Japanese markets are closed for a holiday.
The Hang Seng Index sank 2.7 percent last week, the biggest weekly decline since March, as investors left 76 percent of the Shanghai-Hong Kong exchange link’s quotas unfilled. Mainland investors today used just 1.3 percent of their 10.5 billion yuan ($1.7 billion) daily limit to buy shares listed in Hong Kong today, while 54 percent of the 13 billion daily quota to buy shares in Shanghai was utilized, data compiled by Bloomberg showed.
Futures on the Standard & Poor’s 500 Index rose 0.2 percent today. The U.S. equities benchmark advanced 1.2 percent last week, reaching an all-time high, as data from labor to housing added to signs the recovery in the world’s biggest economy is strong enough to weather weakness overseas. Bloomberg