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Asian Stocks Headed to Best Week Since April as Ringgit Advances

Bloomberg logoBloomberg 28-03-2014 Liau Y-Sing and Nick Gentle

March 28 (Bloomberg) -- Asian stocks rose, with the benchmark index headed toward its biggest weekly advance since April, while Malaysia’s ringgit and the Australian dollar led gains in regional currencies. Precious metals rebounded as copper pared a quarterly decline.

The MSCI Asia Pacific Index increased 0.4 percent by 11:08 a.m. in Tokyo, heading for a 2.9 percent gain for the week. A measure of Chinese shares in Hong Kong rose toward it’s biggest weekly increase since November. Standard & Poor’s 500 Index futures gained 0.1 percent. The ringgit added 0.5 percent to a 1 1/2-week high against the dollar and the Aussie reached a four- month high. Palladium snapped a three-day drop as precious metals cut weekly slumps.

Chinese Premier Li Keqiang said the country has policies in reserve to deal with any economic volatility this year and can’t ignore “difficulties and risks” from a slowdown in the economy, according to a central government-website statement. Treasuries are heading for their first monthly loss this year before a government report forecast to show consumer spending, which accounts for about 70 percent of the U.S. economy, is increasing. U.S. lawmakers passed bills slapping more sanctions on Russia as Ukraine secured a preliminary aid deal.

“Some of the bearish China bets have been taken off the table because of expectation that the Chinese authorities might come up with some stimulus,” said Sim Moh Siong, a foreign- exchange strategist at Bank of Singapore Ltd. “The belief is that they’re coming with something and that should help to stabilize growth and prevent a hard landing. There’s a perception here that perhaps there’s some value in the emerging- market currencies and ringgit is benefiting from it.”

Won, Ringgit

The Hang Seng Index climbed 0.9 percent and the Hang Seng China Enterprises Index added 1.3 percent, taking this week’s advance to 6.1 percent.

South Korea’s won gained 0.3 percent to 1,068.69 a dollar, bringing its first weekly advance in three weeks to 1.1 percent. Korea’s currency is the best performer among 12 Asian peers versus the greenback this week, while the ringgit is posting the third biggest, rising 1 percent.

The Aussie added 0.4 percent to 92.94 U.S. cents in a sixth day of gains, reaching the highest intraday level since Nov. 21.

New Zealand’s dollar gained 0.2 percent to 86.92 U.S. cents, the strongest level since Aug. 2, 2011. Grant Spencer, deputy governor of the country’s central bank, said in a speech yesterday that exporters have adjusted to the currency’s strength. The kiwi has gained 5.8 percent this year versus the greenback, the steepest advance among 16 major peers tracked by Bloomberg.

Ukraine Aid

Ukraine reached a preliminary agreement with the International Monetary Fund to unlock $27 billion of support to avert a debt default and limit economic damage from a four-month political crisis.

Data this week showed a drop in profit growth for Chinese industrial companies, while a private gauge of manufacturing in the world’s second-largest economy signaled a third month of contraction for the sector. The reports spurred speculation that China’s leaders will act to shore up economic growth.

The S&P 500 closed at 1,849.04 in New York, the lowest level since March 14, while the Nasdaq Composite Index slipped 0.5 percent to the lowest level since Feb. 10.

Financial, technology and consumer companies fell at least 0.5 percent to lead losses among seven of the 10 main industry groups in the S&P 500. A midmorning recovery fizzled and investors resumed a rotation out of the bull market’s biggest winners. Citigroup Inc. dropped 5.4 percent, the most since 2012, after its capital plan failed Federal Reserve stress tests.

Ten-year U.S. Treasury yields were little changed at 2.68 percent after falling one basis point in New York.

--With assistance from Yoshiaki Nohara in Tokyo and Emma O’Brien in Wellington.

To contact the reporters on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net; Nick Gentle in Hong Kong at ngentle2@bloomberg.net To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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