Asian Stocks Rise for First Time in Three Days After U.S. Debate

(Bloomberg) -- Asian stocks rose for the first time in three days as investors viewed Democratic candidate Hillary Clinton as having gotten the upper hand in the first U.S. presidential debate against Republican nominee Donald Trump.

The MSCI Asia Pacific Index rose 0.7 percent to 141.85 as of 4:30 p.m. in Hong Kong after sliding as much as 0.9 percent earlier, as S&P 500 Index futures climbed 0.4 percent. The Topix index reversed a drop of as much as 1.7 percent and closed 1 percent higher. In a little more than 90 minute face-off, Trump and Clinton sparred on several key issues including foreign policy, trade, taxes, ISIS and nuclear weapons.

“U.S. futures have moved ahead as the debate unraveled, and I think that is one of the factors” for Asian markets erasing losses, Michael McCarthy, chief market strategist at CMC Markets, said by phone from Sydney. “In policy terms, no doubt to Clinton; in emotional and tone terms, Clinton is also ahead.”

While investors had become more risk-averse ahead of the U.S. debate, partly due to a rout in shares of Deutsche Bank AG, stocks swung to gains and the yen weakened as it progressed. Clinton and Trump leveled sharp and personal charges and counter-charges over trade, the U.S. economy, race and foreign policy, showcasing their different personalities and visions of the nation’s future.

“It’s possibly a reflection of Clinton doing quite well,” Angus Nicholson, a Melbourne-based market analyst at IG Ltd., said by phone. “Trump is largely regarded as a market negative and certainly him doing quite poorly in the debate would reassure a lot of investors.”

Rally Stalls

A rally in Asian stocks after the U.S. decided to keep interest rates unchanged and the Bank of Japan tinkered with its monetary stimulus fizzled out before the U.S. debate as investors scaled back bets and sought safe havens, spurring bond gains. A selloff in bank stocks globally Monday, triggered after Deutsche Bank shares plunged to a record low amid concerns the German lender will need to raise fresh capital, added to risks for investors already anxious about the outcome of the U.S. election and a meeting of oil producers this week.

As the U.S. debate unfolded and investors grew increasingly confident that Clinton was winning arguments against her opponent, losses were reversed across the board, sending the MSCI Asia Pacific Index toward its highest level in 14 months touched on Sept. 22. All but one of the 11 groups on the gauge climbed, with a measure of financial stocks, which fell as much as 1.4 percent in early trading on the back of the global bank stock rout, rising 0.2 percent.

Hong Kong stocks recovered some ground after sinking the most in two weeks on Monday as casinos and banks led gains. The Hang Seng Index climbed 1.1 percent, with Sands China Ltd. rebounding from an almost one-month low and Industrial & Commercial Bank of China Ltd. pacing gains among lenders. The Shanghai Composite Index rose 0.6 percent.

Philippine Selloff

The Philippine Stock Exchange Index dropped 1 percent, bringing its three-day decline to 2.6 percent, the most since May, as investors pulled money from the nation’s assets amid concerns about President Rodrigo Duterte’s policies.

“Sentiment is weak from the combination of global and domestic events,” Jun Calaycay, head of research at A&A Securities, said. “To say President Duterte is the only reason for what’s happening is unfair in the same way that it’s also unfair to say that his statements have no effect.”

Regional Gauges

South Korea’s Kospi index reversed an earlier decline to finish 0.8 percent higher. Singapore’s Straits Times Index added 0.4 percent. Australia’s S&P/ASX 200 Index lost 0.5 percent. New Zealand’s S&P/NZX 50 Index fell 0.2 percent. Financial markets and offices in Taipei are closed Tuesday as Typhoon Megi lashed Taiwan with wind and rain.

Sumitomo Dainippon Pharma Co. jumped 4.9 percent in Tokyo after the Nikkei newspaper reported that the drugmaker is in the final stage of clinical trials for a new type of cancer treatment in Japan and the U.S. Toshiba Corp. gained 5.8 percent after SMBC Nikko Securities Inc. raised its rating on the the stock to outperform. Korean Air Lines Co. climbed 4.4 percent in Seoul as unit Hanjin Shipping Co. rallied amid speculation South Korea’s biggest shipping companies may be acquisition targets for A.P. Moeller-Maersk A/S.

U.S. crude prices declined 1.5 percent during Asian trading, paring some of Monday’s gains as hopes of a deal to reduce production receded. West Texas Intermediate crude rebounded 3.3 percent Monday after sliding 4 percent on Friday. Saudi Arabia offered to pump less crude if Iran capped its output, even as both countries didn’t reach an agreement after two days of preparatory talks in Vienna, according to two people familiar with the negotiations.

--With assistance from Jonathan Burgos and Ian Sayson To contact the reporter on this story: Choong En Han in Kuala Lumpur at echoong6@bloomberg.net. To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net, Andreea Papuc, Tom Redmond

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