Asian Stocks Advance as Oil Producers, China’s H-Shares Rally

(Bloomberg) -- Asian stocks rose for a fourth day as energy producers climbed with oil and Chinese shares in Hong Kong capped their longest winning streak in nine years after data showed the nation’s imports beat estimates in May.

The MSCI Asia Pacific Index rose 0.5 percent to 131.13 as of 4:22 p.m. in Hong Kong, heading for the highest close in six weeks. China’s exports stabilized in May, with a weakening currency giving some support to growth in the world’s biggest trading nation. The World Bank cut its outlook for global expansion as business spending sags in advanced economies including the U.S. The downgrade comes as world equities hover near the highest level of 2016, while the Federal Reserve considers another increase in interest rates.

“With global growth moderating, the Fed will be more gradual in its approach to raising interest rates,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd., which oversees about $120 billion. “That’s going to help boost equities, particularly in emerging markets.”

After recent speculation that Chinese authorities will soon announce the start date for an exchange link with Shenzhen, investors are switching attention to the health of the economy. A report Wednesday showed the nation’s imports slipped 0.4 percent in yuan terms, the smallest drop since late 2014, while overseas shipments fell 4.1 percent.

The China data suggests “things have stabilized, which is better than what it was a few months ago, but stabilization does not mean a bull market,” said Khiem Do, the Hong Kong-based head of multi-asset strategy at Baring Asset Management. “Most people are still a little bit careful and cautious.”

The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong climbed 0.3 percent, gaining for a ninth day in its longest winning streak since March 2007. The Shanghai Composite Index dropped 0.3 percent, after falling as much as 0.9 percent earlier. The Hang Seng Index declined 0.1 percent.

Japanese Growth

Japan’s Topix index advanced 0.8 percent. The gauge lost as much as 0.6 percent earlier as the yen rose for the sixth time in seven sessions against the dollar. Gross domestic product expanded by an annualized 1.9 percent in the three months ended March 31, more than a preliminary report of 1.7 percent, according to revised data from the Cabinet Office released on Wednesday.

Australia’s S&P/ASX 200 Index was little changed. South Korea’s Kospi Index added 0.8 percent, Taiwan’s Taiex index climbed 0.4 percent and Singapore’s Straits Times Index gained 0.5 percent. India’s S&P BSE Sensex index rose 0.2 percent, while New Zealand’s S&P/NZX 50 Index lost 0.7 percent.

The MSCI Emerging Markets Index headed for a fifth daily gain, the longest winning streak in almost two months. Vietnam shares climbed for a second day, taking gains from a January low to 20 percent. Philippine equities extended their advance to a one-year high.

Santos Ltd. climbed 2.6 percent in Sydney, pacing gains among energy producers. HTC Corp. jumped 7.8 percent in Taipei after the smartphone maker said sales improved last month. Panasonic Corp. added 3.7 percent in Tokyo after Elon Musk reaffirmed in Twitter posts that the Japanese company was the exclusive supplier of batteries to Tesla Motors Inc. Hyundai Merchant Marine Co., South Korea’s second-biggest shipping company, tumbled 15 percent in Seoul as investors worried that a planned debt-for-equity swap would dilute their holdings.

Fed, BOJ

Central banks are in the spotlight, with policy decisions from the Fed and the Bank of Japan scheduled for next week. Futures traders lowered the possibility of a U.S. interest rate hike by July to 18 percent after Fed Chair Janet Yellen signaled Monday that the world’s biggest economy is strengthening enough to withstand gradual increases in borrowing costs. Asian stocks rallied to a five-week high on Tuesday after Yellen’s comments.

International gross domestic product will increase by 2.4 percent this year, an “insipid” pace that’s unchanged from 2015 and down from the 2.9 percent estimated in January, the World Bank said Tuesday in its semiannual Global Economic Prospects report. The Washington-based lender cut its growth outlook for Japan to 0.5 percent, down from 1.3 percent in January, amid weak consumer spending and exports.

Futures on the S&P 500 Index were little changed. The U.S. equity benchmark index gained 0.1 percent on Tuesday, finishing less than 1 percent below an all-time high, as rallies in energy producers and airline operators offset slumping health-care and bank shares.

West Texas Intermediate crude oil added 0.4 percent to $50.55 a barrel. U.S. crude stockpiles are estimated to have fallen for a third week, trimming a glut. Crude has surged about 90 percent from a 12-year low in February amid unexpected disruptions and a continuous slide in U.S. output, which is under pressure from the Organization of Petroleum Exporting Countries’ policy of pumping without limits.

--With assistance from Adam Haigh To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net, Andrew Janes

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