Asian shares skyrocketed, with the regional index bouncing back from its largest two week sag down since June. Copper erased last week’s hike as a preliminary Chinese manufacturing gauge surprisingly decline, while gold and silver slide lower.
The MSCI Asia Pacific Index inched up 0.8 percent by 11:54 a.m. in Tokyo as Chinese companies in Hong Kong boosted a second day after marching towards a bear market last week. Standard & Poor’s 500 Index futures inched up 0.1 percent. Copper depreciated 0.5 percent after logging its first weekly surge since February 21. Gold plummeted for the fifth time in six days and silver pulled back 0.9 percent. Corn futures escalated 0.8 percent.
A preliminary purchasing managers’ index from HSBC Holdings Plc and Markit Economics was at 48.1, from a last reading of 48.5 in February, indicating a third month of contraction and coming in under the median projection of 22 economists for a reading of 48.7. China's cabinet last week stated that it would accelerate already-decided growth initiatives. France, Germany, the eurozone and the U.S. also publish early indicators for March manufacturing today.
“The worse the PMI data is, the bigger the chance of stimulus so perhaps people are looking at it that way,” said Dariusz Kowalczyk, a Credit Agricole CIB strategist in Hong Kong. “The key thing is that the government started talking about stimulus, because had they not begun floating that idea, the reaction would clearly be negative. Because we have a statement of policy intent to protect the bottom line, the negative data would probably only strengthen the resolve of those in government who want to spend more money and limit losses.”
Stocks Surge
About two stocks advance for each that decline on the Asia-Pacific equity measure, with all 10 industry groups soaring higher.
Hong Kong’s Hang Seng Index bolstered 1 percent amid volume that was more than twice the 30-day average for the time of day. The Hang Seng China Enterprises Index of Chinese firms recorded in the city boosted 1.6 percent after a 2.4 percent hike on March 21.
The CSI 300 Index (SHSZ300) of stocks in Shanghai and Shenzhen was slightly altered after climbing 3.4 percent on Friday, the most since September, in the middle of assumptions that China would allow some firms to use preferred shares to raise funds.
China issued policies after markets closed March 21 for a trial program allowing firms to merchandised preferred stock, expanding financing options for the country’s banks as they look to address tougher capital requirements. Firms will be able to issue the shares if they are included in the Shanghai Stock Exchange 50 A-Share Index, the China Securities Regulatory Commission said in a statement on its official microblog.
Policy Measures
“Weakness is broadly-based with domestic demand softening further,” Qu Hongbin, Hong Kong-based chief China economist at HSBC, said in a statement. “We expect Beijing to launch a series of policy measures to stabilize growth.”
All but two of 33 industries on the Topix advanced. The Kospi Index jumped a second day, surging 0.4 percent, while Australia’s S&P/ASX 200 Index relinquished 0.2 percent.
Global stocks sagged down 1.3 percent this month as a run of unsatisfactory economic reports and corporate defaults in China dented the outlook for global growth. Russia’s annexation of the Black Sea region of Crimea from Ukraine has also triggered declines, with the U.S. and Europe levying penalties versus business people and affiliates of President Vladimir Putin’s administration. Pro-Russia forces seized two bases including a military airport in Crimea March 22.
The China data is “reflecting a slowdown we are seeing globally,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. “As long as we can see what’s happening with the global economy, it’s not a surprise. Obviously it’s not an upbeat for the market, but I don’t think it’s a huge negative.”
Sinopec Profits
Sinopec based on Beijing, Asia’s largest oil refiner, recorded greater 2013 earnings at the weekend that still trailed analysts’ projections.Sinopec reported yesterday that net income last year zoomed higher with 3.4 percent to 66.1 billion yuan ($10.6 billion), below the 67.8 billion-yuan mean of 12 analysts’ projections compiled by Bloomberg.
Copper for delivery in three months pulled back as much as 0.9 percent to $6,419.75 a metric ton on the London Metal Exchange and was at $6,445. The price reached $6,321 on March 19, the weakest mark since July 2010.
