Bloomberg/Hong Kong
Asian stocks posted their biggest weekly gain since August 2007 amid optimism governments worldwide will succeed in reviving lending and global growth.
The MSCI Asia Pacific Index has rallied 21% from a five-year low on March 9, technically entering a bull market. Toyota Motor Corp, which gets 37% of its sales from North America, gained 10% in Tokyo on optimism the US Treasury’s plan to remove banks’ toxic assets will revive economic growth. BHP Billiton Ltd, the world’s No 1 mining company, climbed 5.7% in Sydney after prices for oil and metals advanced.
“We are building a base for the next bull market,” Mark Mobius, who helps oversee about $20bn of emerging-market assets at Templeton Asset Management Ltd, said in Hong Kong. “You have to be careful not to miss the opportunity. With all the negative news, there is a tendency to hold back.”
MSCI’s Asian benchmark gauge rose 7.5% to 85.49 this week, its best weekly performance since the week ended August 24, 2007. A measure tracking energy stocks on the MSCI gauge rallied 11% this week, the sharpest jump among the 10 industry groups on the MSCI Asia Pacific Index.
Hong Kong’s Hang Seng Index rose 10%, its best week since October. Japan’s Nikkei 225 Stock Average climbed 8.6% while South Korea’s Kospi Index added 5.7%.
Governments from the US to Japan are widening measures to ease the financial crisis, which has caused more than $1tn of losses worldwide, and to avert what the World Bank predicts will be the first global economic contraction since World War II.
The US Treasury announced on Monday plans to rid banks of toxic real-estate assets. The country and Japan also pledged on March 18 to buy government debt, while banks including Barclays Plc reported strong starts to the year.
Toyota jumped 10% to ¥3,260 in Tokyo this week. Sony Corp, which gets a quarter of its sales from the US, surged 13% to ¥2,225. Samsung Electronics Co, the world’s biggest maker of computer memory, rose 7.8% to 584,000 won in Seoul.
BHP climbed 5.7% to A$34.01 in Sydney this week. CNOOC Ltd, China’s biggest offshore oil producer, jumped 11% to HK$8.33 in Hong Kong. Crude oil added 2.6% to $52.38 a barrel in New York this week. A measure of six primary metals traded in London fell 0.1%.
Rio Tinto Group, the world’s third-largest mining company, soared 21% to A$56.88. The company said March 26 that it had an alternative plan should Aluminum Corp of China’s $19.5bn investment deal fail.
MSCI’s Asian benchmark gauge rose 13.7% in March, which was the biggest monthly gain since October 1998, when governments were cutting interest rates to alleviate the Asian financial crisis.
The gains pared the measure’s drop this year to 4.6%, and raised the average valuation of companies on the MSCI Asia Pacific Index on Friday to 16.7 times profit, the highest level since December 2007, data compiled by Bloomberg show.
The gauge’s 14-day relative strength index, which measures how rapidly prices have risen or fallen, yesterday rose above the level of 70 that some traders use as a signal to sell.