Asia Stocks Climb With Commodities After China Settles Market

by **Cals** Fri 28 Aug 2015, 11:27

[size=49]Asia Stocks Climb With Commodities After China Settles Market[/size]
Emma O'Brien Nick Gentle [size=11]August 28, 2015 — 7:36 AM MYT
Updated on August 28, 2015 — 11:02 AM MYT

Asian stocks extended gains into a third day and commodities climbed with emerging-market currencies as China’s support for its beleaguered equity market and a strong U.S. growth number bolstered investors’ appetite for riskier assets.

The MSCI Asia Pacific Index is heading for its biggest three-day rally since 2011, leaving it little changed for the week. Chinese shares climbed for a second day, while U.S. indexfutures slipped after the Standard & Poor’s 500 index rose 2.4 percent. Oil, which surged 10 percent in New York on Thursday, climbed above $43 a barrel, while copper and gold advanced. Treasuries headed for the deepest weekly drop since June as a rally turned into a rout.

“We seem to have gained some sort of stability and people are focusing more on the underlying strength of the U.S. economy,” Chris Green, director of economics and strategy at First NZ Capital Ltd. in Auckland, said by phone. The report “gave credence to the story that the U.S. economy could be building momentum. In the world we’re looking at now, that is of some comfort.”

China intervened to shore up its volatile equity market late Thursday, according to people familiar with the matter, while a commentary in the official Xinhua News Agency said developed-nation monetary policies were to blame for global financial-market volatility. Global stocks are close to erasing losses for the week, spurring an unwinding of haven flows that sent U.S. 10-year yields plunging below 2 percent on Monday.

Market Movers

The Asia-Pacific stocks gauge climbed 2 percent by 11:54 a.m. in Tokyo, reducing its sixth straight weekly decline to less than 0.1 percent. Japan’s Topix index added 3.1 percent and Australia’s S&P/ASX 200 Index rose 0.7 percent. The Hang Seng China Enterprises Index rose 0.8 percent.

Futures on the S&P 500 slipped 0.5 percent after the gauge capped its biggest two-day rally since March 2009, when stocks bottomed during the global financial crisis. Dow Jones Industrial Average contracts fell 0.2 percent and those on the Nasdaq 100 Index weakened 0.4 percent.

The Shanghai Composite Index advanced 2.1 percent. China’s yuan advanced the most since April after the central bank boosted the currency’s reference rate in the biggest increase in five months. The People’s Bank of China’s daily fixing was set 0.15 stronger at 6.3986 a dollar on Friday.

‘Save Face’

Policy makers are said to be trying to end a stock rout before a Sept. 3 military parade that will celebrate the 70th anniversary of the World War II victory over Japan.

“China wants to save face as the parade approaches,” said Daniel Chan, a Hong Kong-based analyst at Brilliant & Bright Investment Consultancy Ltd. “The fixing shows the desire to calm the market and limit yuan devaluation expectations.”

The benchmark gauge for China’s largest equity venue hasn’t spent an entire day above the break-even line since Aug. 10, the day before China devalued its currency. The measure dipped as much as 0.7 percent Thursday before surging in the last hour of trade and closing 5.4 percent higher.

Asian Currencies

South Korea’s won strengthened 0.8 percent and Malaysia’s ringgit extended its rebound from a 17-year low amid oil’s recovery. The Australian and New Zealand dollars advanced at least 0.3 percent. China is the biggest trading partner for all four countries.

The Bloomberg Commodity Index rose 0.4 percent, extending a 3 percent gain Thursday that was propelled by a 10 percent pop in West Texas Intermediate crude prices. The biggest surge for U.S. oil since March 2009 pushed the contract to toward its largest weekly advance in four months. Prices hit their lowest since February 2009 on Monday.
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