Chinese Premier, Wen Jiabao
(Bloomberg) Asian stocks rose for the first time in five days amid speculation China will add to economic stimulus. Natural gas climbed to a five-month high and corn snapped a three-day advance that drove prices up 13 percent.
The MSCI Asia Pacific Index advanced 0.6 percent as of 1:42 p.m. in Tokyo. Hong Kong’s Hang Seng Index climbed 1.1 percent. Standard and Poor’s 500 Index futures were little changed. Natural gas futures gained 1.1 percent, rising for a fifth day in New York. Corn slid 0.8 percent after surging the previous three days amid dry weather that curbed U.S. production.
The China Securities Journal said the country may introduce “more proactive” policies to ensure stable growth in the world’s second-largest economy, while the Xinhua News Agency said China is planning measures to boost cooperation with Hong Kong. Trading volumes on benchmark indexes in Japan and China were more than 15 percent below the 30-day intraday average, on the eve of Europe’s 19th summit to tackle the debt crisis, Bloomberg reported Wednesday.
“Most people think nothing has happened over the last 18 summits, so what can you expect from the 19th,” said Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management (Asia) Ltd., which oversees about $8 billion. “China still has a lot of tools available to it. Policy makers think, yes, the economy is slowing but it’s not a hard landing. They’re going to implement their policies gradually, not aggressively.”
Two stocks gained for each that dropped in the MSCI Asia Pacific Index (MXAP), which lost 3 percent in the past four days. The gauge has tumbled 12 percent from its peak this year on Feb. 29 amid concern global growth is slowing as Europe’s debt crisis worsens. The Shanghai Composite Index advanced 0.3 percent, while benchmark gauges in the Philippines and Indonesia climbed more than 1 percent.
The Hang Seng Index rose the most in almost two weeks after Xinhua cited a statement from China’s State Council as saying the nation will allow financial institutions in Hong Kong to set up consumer-financing companies in Guangdong province, among other measures to boost cooperation. President Hu Jintao visits Hong Kong June 29 to July 1 for the 15th anniversary of the city’s return to Chinese rule.
Japan Tobacco Inc. (2914), Asia’s largest cigarette maker by market value, climbed 2.5 percent in Tokyo as investors sought shares of companies whose sales are least affected by an economic slump. Hopewell Holdings Ltd. surged 9.5 percent in Hong Kong after agreeing to pay the city’s government about $480 million to develop a hotel project.
China Stimulus
China may stabilize foreign trade, expand infrastructure investment, fine-tune monetary policies and reduce taxes, according to a commentary on the front page of the China Securities Journal. The central bank may lower reserve requirements for banks next month for the fourth time since November, the Shanghai Securities News reported.
Natural gas futures climbed to $2.797 per million British thermal units, poised for the highest close since January as forecasts for hot weather signaled increased demand for the power-plant fuel.
The yen held near a one-week high against Europe’s shared currency. German Chancellor Angela Merkel and French President Francois Hollande meet today ahead of tomorrow’s summit. The Japanese currency traded at 99.27 per euro. It added 0.1 percent to 79.43 per dollar.