HONG KONG (BLOOMBERG) - Asian stocks climbed, tracking the biggest gain in US equities in four years, after a two-week selloff drove valuations to the lowest since 2012. Industrial metals rallied, while the yen weakened.
The Straits Times Index jumped 1.55 per cent on opening, and was trading up 1.89 per cent at 2,927.41 as of 2:10 am.
Chinese companies listed in Hong Kong led gains, while Japan's Topix index headed for its biggest two-day increase in nine months. Jakarta stocks jumped the most since 2013, with Indonesia's government set to announce "big" economic stimulus. US index futures were steady after the Standard & Poor's 500 Index's advance restored some appetite for riskier assets. Copper led metals higher, while oil rose.
"The rebound in US stocks has spurred a reversal of the flight to quality we've been seeing," said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank Ltd. in New York. "The trend for a gradual weakening of the yen is set to continue after a short-term correction."
The rally in US stocks halted a selloff that's erased more than US$8 trillion from global equities since China devalued its currency on Aug. 11. The rout spread from commodities and emerging-market assets, denting confidence in the global economy and spurring investors to wind back bets on the Federal Reserve raising interest rates at its next meeting. New York Fed chief William C. Dudley also cast doubt over a September rate increase in an unscheduled address Wednesday, helping to fuel the rebound.
The S&P 500 ended Wednesday up 3.9 per cent, its steepest increase since November 2011, with technology stocks and health care shares driving the bounce back. Futures on the gauge were little changed by 1:46 pm in Tokyo, paring a 0.6 per cent advance.
The Shanghai Composite Index climbed 1.6 per cent, trimming an early gain of 3 per cent. The gauge dropped 43 per cent from a June high through Wednesday. China's benchmark index's correlation to both S&P 500 futures and the yen climbed to the highest levels on record, according to data compiled by Bloomberg.
The MSCI Asia Pacific Index rose 1.6 per cent, taking its two-day advance to 3.2 per cent. The last time the gauge jumped that much during a two-day period was in June 2013, when Asian shares were rebounding after a cash crunch in China drove Hong Kong equities into a bear market.
Stocks in the Asia-Pacific gauge traded at less than 1.3 times the value of their assets on Tuesday, the lowest since November 2012, according to data compiled by Bloomberg.
The Hang Seng China Enterprises Index advanced 3.4 per cent Thursday. Australia's S&P/ASX 200 Index rose 1.3 per cent, while all other major indexes in the region also moved higher.
The Jakarta Composite Index rose 3.5 per cent. Indonesia's Finance Minister will elaborate on a package of deregulation, new policies and a tax holiday, Darmin Nasution, coordinating minister for economic affairs, told reporters.
Japan's Topix climbed 1.7 per cent, heading for a second straight increase. The measure capped its longest streak of losses since April 2014 on Tuesday. The yen slipped 0.2 per cent to 120.14 per US dollar. The currency, which is seen as a haven in times of crisis, jumped by the most in four years on Monday, when US$2.7 trillion was wiped from global equities.
West Texas Intermediate crude futures rose as much as 2.5 per cent in New York. Crude stockpiles fell by 5.45 million barrels to 450.8 million last week, the Energy Information Administration reported Wednesday, compared with an increase of 1.45 million forecast in a Bloomberg survey. Production slid to the lowest in more than three months. Brent added 2.2 per cent to US$44.07 a barrel in London.
Copper for three-month delivery climbed 1.1 per cent to US$4,990.50 on the London Metal Exchange. The contract finished Wednesday at US$4,935 a metric ton, the lowest since July 2009 as stockpiles tracked by the LME climbed to the highest in almost two years, compounding demand concerns spurred by the slowdown in China, the world's top metals consumer.