Asian stocks climbed, lifting the MSCI Asia Pacific Index to its best year since 2003, as commodity prices rose and China pledged to maintain a “moderately loose” monetary policy.
BHP Billiton Ltd, the world’s largest mining company, gained 1 per cent as copper extended yesterday’s rally in New York, while crude rose for a seventh day. Fortescue Metals Group Ltd, Australia’s No 3 iron-ore producer, rallied 2.1 per cent. Bank of China Ltd rose 3.2 per cent in Hong Kong as Chinese central bank Governor Zhou Xiaochuan said the People’s Bank of China will encourage lending to some industries.
The MSCI Asia Pacific Index climbed 0.6 per cent to 120.59 at 11.51 am in Hong Kong. The gauge has risen 35 per cent this year as central banks cut borrowing costs and governments boosted spending to shore up their economies. The index sank 43 per cent in 2008 as the credit crisis and deepening global recession pummeled corporate profits around the world.
“We’re still positive on 2010, as there remains a lot of filtering down of fiscal stimulus,” said Daphne Roth, Singapore- based head of Asian equity research at ABN Amro Private Banking, which oversees about $21 billion in the region. “The low-hanging fruit though has been picked and we won’t see the phenomenal returns we saw this year.”
The MSCI index measures stocks in Japan and South Korea, where markets are shut today for holidays. All markets in Asia are closed tomorrow to mark the new year, except Pakistan.
The Hang Seng Index added 1.6 per cent in Hong Kong. Its 52 per cent climb this year is the steepest since 1999. Australia’s S&P/ASX 200 Index rose 0.8 per cent, taking its 2009 gain to 31 per cent. New Zealand’s NZX 50 Index rose 0.3 per cent, advancing 19 per cent for the year.
Economic recovery
Lonking Holdings Ltd, which makes construction equipment in China, jumped 3.9 per cent in Hong Kong after BNP Paribas SA recommended the stock. Qantas Airways Ltd advanced 2.1 per cent in Sydney on signs global air travel is picking up.
Futures on the Standard & Poor’s 500 Index rose 0.1 per cent. The gauge added less than 0.1 per cent yesterday as a report from the Institute for Supply Management-Chicago Inc showed US companies expanded in December at the fastest pace in almost four years. Most US stocks fell amid speculation the Federal Reserve will withdraw stimulus measures.
This year’s gain in Asian stocks is part of a global rally that has boosted the MSCI World Index by 28 per cent, on course for its steepest increase since 2003.
