Asian Stocks Gain on Global Rally; Silver to Aussie Climb

Asian Stocks Gain on Global Rally; Silver to Aussie Climb
By Emma O’Brien and Adam Haigh  Mar 5, 2014 8:52 AM GMT+0800
Asian stocks rose, with the regional index posting its biggest one-day gain in more than a week, after global equities rebounded and China kept its growth target unchanged. Silver and emerging-market currencies climbed as better-than-estimated economic data lifted Australia’s dollar.

The MSCI Asia Pacific Index climbed 0.9 percent by 9:51 a.m. in Tokyo, rising the most on a closing basis since Feb. 21 as shares from Japan to South Korea (KOSPI) and Australia jumped. Standard & Poor’s 500 Index futures dropped 0.1 percent following the gauge’s return to a record high. The currencies of Korea, Malaysia and Thailand added at least 0.1 percent. The Aussie increased 0.4 percent after fourth-quarter growth came in faster than economists expected. Silver climbed 0.3 percent.

China set an annual economic growth target of 7.5 percent, unchanged from 2013, according to the transcript of a report Premier Li Keqiang will give at an annual meeting of lawmakers in Beijing today. Leaders have pledged to move away from growth at all costs as environmental and societal challenges mount. Russia played down the risk of an immediate invasion of Ukraine yesterday, shifting focus back to the global economy with service-industry data on China to the U.S. and Europe due today.

“The immediate future confirmation of a 7.5 percent growth target will be seen as a relief,” Ric Spooner, the Sydney-based chief analyst at CMC Markets, said by e-mail before details of the premier’s work report were released. Russia’s “indication that military force would only be used in an extreme case saw a general risk-on scramble,” Spooner said.

Topix Jumps

Japan’s Topix Index (TPX) gained 1.4 percent, also the most since Feb. 21, while the Kospi Index in Seoul added 1 percent. Australia’s S&P/ASX 200 Index climbed a second day, gaining 0.6 percent, as New Zealand’s NZX 50 Index increased 0.8 percent to a record high.

The MSCI All-Country World Index of global stocks jumped to a more-than six-year high yesterday, rallying 1.3 percent as Russian shares and the S&P 500 rebounded. Russian President Vladimir Putin, in his first public remarks since Russian forces took over Ukraine’s Crimea region, said he sees no immediate need to invade eastern Ukraine. Though he reserves the right to use force to defend Russians in the country, Putin said there was “no such necessity” at present.

About 3,000 delegates will converge on Beijing from today for the National People’s Congress.

Services PMIs

Maintaining a pace of expansion close to last year’s 7.7 percent would help sustain demand for oil and iron ore and support a global economy that’s forecast by the International Monetary Fund to accelerate. At the same time, analysts from UBS AG to Societe Generale SA say a lower goal for China would’ve been more in keeping with the government’s commitment to move away from a singular focus on expanding the economy.

HSBC Holdings Plc and Markit Economics Ltd. release services purchasing managers’ indexes for India and China today, while European nations from Sweden to Germany and France publish their own gauges on the industry.

The South Korean won jumped 0.4 percent to 1,069.20 per dollar after the currency ended yesterday down 0.3 percent. The Malaysian ringgit gained 0.1 percent and the Thai baht rose 0.2 percent. One-month non-deliverable forwards on the Indonesian rupiah strengthened 0.3 percent.

The Aussie climbed to 89.80 U.S. cents in a third day of gains after the government statistician said Australia’s economy grew 0.8 percent in the last three months of 2013 from the previous quarter. Economists surveyed by Bloomberg were projecting expansion of 0.7 percent after gross domestic product climbed 0.6 percent on a quarter-on-quarter basis in the three months to Sept. 30.

Yen Steady

Australian 10-year government bonds yielded 4.06 percent, up six basis points, or 0.06 percentage point, after rates slid to the lowest level on a closing basis since October on March 3. Yields on 10-year U.S. Treasury notes were little changed at 2.69 percent after rising 10 basis points in New York, the most since Nov. 8.

The yen was little changed at 102.18 per dollar after sliding 0.8 percent against the greenback and euro yesterday as diminishing prospects Russia will mount a full-on invasion of Ukraine deterred investors from safe havens.

Ukraine, a former Soviet republic, has been plunged into turmoil since protesters forced the ouster of the president last month. Russia keeps its Black Sea fleet in Crimea, where the majority language is Russian. Troops in the region have only been securing their bases and gunmen who have seized crucial infrastructure and surrounded military installations in the Crimea are acting independently, Putin said yesterday.

Commodity Markets

Silver rose to $21.2170 an ounce while gold was steady at $1,335.22 an ounce, after sliding the most in more than a month yesterday, down 1.2 percent. Platinum snapped a two-day gain, falling 0.6 percent. Rubber futures in Tokyo jumped 1.2 percent.

West Texas Intermediate crude oil was little changed at $103.31 a barrel after sliding 1.5 percent from a five-month high yesterday. Natural gas futures lost 0.9 percent in early trading following yesterday’s 3.9 percent jump on forecasts for below-normal March temperatures in the U.S. that would stoke demand for the heating fuel.

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