A gauge of Chinese shares listed in Hong Kong soared 6.1 percent as investors bet leaders of the world’s second-biggest economy will step up efforts to bolster growth after data showed further signs of slowdown. The MSCI Asia Pacific Financials Index gained 3.4 percent as SBI Holdings Inc., which manages venture capital funds and owns an online brokerage, soared 21 percent in Tokyo. Yahoo Japan Corp. slumped 9.3 percent after agreeing to buy eAccess Ltd. for 324 billion yen ($3.2 billion) from parent SoftBank Corp., which lost 6.3 percent this week..
The MSCI Asia Pacific Index gained 2.9 percent to 136.68 this week, the most since the period ended April 26, after rising four of five days. The gauge is headed toward a 0.8 percent decline in March, on course to close 3.3 lower for the first quarter of 2014.
The market’s focus is switching to the next catalysts, such as expectations for government action. In China, the economic outlook is worsening for sure, but I think hopes for government measures are providing a floor to the market.
Flash Purchasing Managers’ Index of Chinese factory activity from HSBC Holdings Plc and Markit Economics Ltd. unexpectedly slid in March, contracting a third month and deepening concern the nation will miss its 7.5 percent growth target this year.
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, according to a central-government website statement.
The Hang Seng China Enterprises Index, also known as the H-share index, gained the most since November this week in Hong Kong, extending its rebound to 8.7 percent since entering a bear market on March 20. The benchmark Hang Seng Index rose 2.9 percent this week after falling the previous three weeks. The Shanghai Composite Index slid 0.3 percent.
Japan’s Topix index gained 3.5 percent, its first weekly advance in three and biggest such gain in four months, while the Nikkei 225 Stock Average added 3.3 percent. The nation’s stocks are the developed world’s worst performers this year amid a stronger yen and ahead of a sales-tax increase next week that’s predicted to contract the economy.
Data yesterday showed Japan’s household spending fell 2.5 percent from a year earlier in February, the first drop in six months, compared to the median estimate of economists for a 0.1 percent rise. Retail sales slowed, while a measure of inflation that excludes energy and fresh food increased the most since 1998.
South Korea’s Kospi index climbed 0.8 percent. Australia’s S&P/ASX 200 Index added 0.5 percent, while New Zealand’s NZX 50 Index rose 0.4 percent. Singapore’s Straits Times Index added 3.2 percent.
The MSCI Asia Pacific Index fell 4.2 percent this month through March 20 before rebounding. Shares were weighed down by concern about tension in Ukraine as Russian President Vladimir Putin annexed Crimea.
President Barack Obama said this week the U.S. and its European allies stand united against Russian attempts to redraw Ukraine’s boundaries, while warning that indifference would ignore the lessons from two world wars.
The Asia stocks gauge ended the week trading at 12.64 times estimated earnings, compared with multiples of 15.85 for the Standard & Poor’s 500 Index and 14.45 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
This week has essentially been a technical bounce after a very hard month. It’s been volatile recently with lots of rotation in and out of sectors and chopping around. You have to be on your toes or else you get run over. I expect it to ease off next week.
Financial shares gained this week. SBI Holdings rose 21 percent to 1,269 yen in Tokyo. Industrial & Commercial Bank of China Ltd., among more than 160 members of the Hang Seng Composite Index to report results since March 21, rose 6.5 percent this week to HK$4.72 in Hong Kong. Net income at the world’s most profitable lender rose 10 percent to 262.6 billion yuan ($42.3 billion) in 2013 from a year earlier.
AAC Technologies Holdings Inc. surged 25 percent to HK$39.55, the most on the MSCI Asia Pacific Index, after brokerages including UBS AG and Daiwa Securities Group Inc. boosted their rating on the stock on optimism for its non-acoustic products.
Tencent dropped 6.6 percent to HK$535.00. Asia’s biggest Internet company slid amid concern the sector’s rally has gone too far and that buyers are overpaying for acquisitions. Shares of Asia’s biggest Internet company almost doubled last year and traded at 44.6 times estimated earnings as of March 6, when it last closed at a record high, compared with 23.1 times for Google Inc. King Digital Entertainment Plc, developer of the “Candy Crush” gaming app, tumbled 16 percent in its New York trading debut on March 26, despite pricing its shares at a discount to its peers.
Yahoo Japan tumbled 9.3 percent to 514 yen, the lowest since Dec. 6. SoftBank slid 6.3 percent to 7,694 yen. Yahoo Japan is paying 80 percent more in cash for eAccess than the 180 billion yen ($1.8 billion) SoftBank paid for the assets at the end of 2012, as it seeks to add bandwidth for users surfing the Web, watching videos and playing games. All companies involved in the deal are controlled by billionaire Masayoshi Son.