Asian stocks pare best weekly gain since July as Topix declines

Pedestrians are reflected on an electronic stock board outside a securities firm in Tokyo, Japan.
Pedestrians are reflected on an electronic stock board outside a securities firm in Tokyo, Japan. PHOTO: BLOOMBERG

SINGAPORE (BLOOMBERG) - Asian stocks fell for the first time in six days, with the regional benchmark gauge paring the biggest weekly advance since July, as Japanese exporters retreated and a rally in Hong Kong equities lost steam. 

For the week, the Straits Times Index gained about 30 points or just over one per cent, including 10.89 points on Friday.

The MSCI Asia Pacific Index dropped 0.2 per cent to 142.00 as of 4:10 p.m. in Hong Kong, halting a five-day increase. The measure has advanced 3.6 per cent this week.

The Topix index lost 0.2 per cent as Japanese markets resumed trading following a holiday on Thursday and the yen firmed against the dollar after the Bank of Japan didn't move deeper into negative interest-rate territory.

Moves by the Federal Reserve to scale back its tightening plans and the BOJ's decision to tweak its stimulus this week helped ease concerns that central banks might taper efforts to stimulate global growth.

"There's a very bullish case for equities considering that the Fed is now expecting only two rate hikes in 2017," said James Woods, a strategist at Rivkin Securities in Sydney. "There are uncertainties that could shake up some volatility in the market, including the US elections in November. But given where valuations are, I'd be a little cautious."

Shares on the MSCI Asia Pacific Index traded at 13.8 times projected earnings for the next 12 months, near the highest level since June 2015, according to data compiled by Bloomberg.

The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong sank 1 percent, paring the steepest weekly increase in two weeks, as banks and brokerages declined. The H- share index has rallied 12 percent this quarter to outperform the Shanghai Composite by the most since 2011 as mainland investors flocked to Hong Kong stocks amid cheaper valuations, a stable currency and the imminent start of a second exchange link with China.

The Hang Seng Index and Shanghai Composite Index dropped at least 0.3 per cent.

Thailand's SET Index retreated 1.1 per cent, trimming a second weekly advance. The Philippine Stock Exchange Index fell 0.5 per cent, while the Jakarta Composite Index slipped 0.3 per cent. New Zealand's S&P/NZX 50 Index lost 0.2 per cent.  Australia's S&P/ASX 200 Index climbed 1.1 per cent to the highest close since Aug. 31 as phone companies and health-care shares advanced. South Korea's Kospi index added 0.2 per cent and Taiwan's Taiex index gained 0.5 per cent.