Asian stocks, currencies join global rally after ECB signals more stimulus, STI up 1%

An electronic screen and ticker board indicating stock figures at the Singapore Exchange headquarters in Singapore.
An electronic screen and ticker board indicating stock figures at the Singapore Exchange headquarters in Singapore. PHOTO: BLOOMBERG

WELLINGTON (BLOOMBERG) - Asian stocks and currencies jumped as the prospect of more stimulus from the European Central Bank combined with better-than-estimated technology earnings in the US and rising Chinese home prices.

The MSCI Asia Pacific Index erased the loss from the first four days of this week to be headed for its longest streak of gains since April after the ECB signaled it will consider bolstering its bond-buying program before the end of 2015. The index jumped 1.7 per cent by 11:38 am in Tokyo.

Singapore's Straits Times Index climbed 0.96 per cent to 3,067.19 as of 12:02 pm.

Japan's Topix index climbed 2.1 per cent, Australia's S&P/ASX 200 Index climbed 1.8 per cent, heading for a weekly gain of 1.7 per cent. New Zealand's S&P/NZX 50 Index rose for an 11th day in its longest rally since November. It's extending a record high.

The Kospi index jumped 1.4 per cent Friday. Gross domestic product in South Korea expanded 2.6 per cent last quarter from a year earlier, exceeding the 2.4 per cent median of economists' estimates.

Hong Kong's Hang Seng China Enterprises Index increased 1.5 per cent, taking its October advance beyond 14 per cent, while the Hang Seng Index climbed 1.4 per cent. The Shanghai Composite Index added 0.5 per cent.

Property stocks led gains in Hong Kong. China's new-home prices rose in 39 cities, compared with 35 in August, the National Bureau of Statistics said Friday. Prices dropped in 21 cities, fewer than the 25 in August, and were unchanged in 10.

"Mario Draghi and his elves at the ECB practically confirmed there will be an early Christmas present," Evan Lucas, a market strategist in Melbourne at IG Ltd., said in an e-mail to clients. "In short, all options are on the table for the ECB, also meaning the Bank of Japan and the Fed are now live events as well."

The ECB's willingness to consider adding stimulus comes as reports from the largest economies have highlighted how sliding demand is colliding with the plunge in commodity prices to make central banks' inflation goals ever-more elusive. The BOJ and Federal Reserve both consider monetary policy next week, with traders offering just a 6 per cent chance of an increase to US rates.

Equities also got a lift from the results of Google and Amazon, which reported a surprise profit, as well as Microsoft Corp.

Futures on the Nasdaq 100 traded at 4,570.25, compared with 4,492.50 at 4 p.m. Thursday in New York and the index's closing level of 4,503.22. Shares of Alphabet, Google's new holding company, soared as much as 13 per cent after hours as an increase in advertising sales and restrained spending underpinned the third-quarter results. Amazon reported a 17 cents-a-share profit, amid analysts' expectations for a loss of 13 cents. Microsoft rallied 7.9 per cent in extended trade on above- estimate earnings.

Standard & Poor's 500 Index futures rose 0.3 per cent following a 1.7 per cent surge in the US benchmark. Thursday's gain brought the S&P 500's rebound from an August trough to 9.9 per cent and the gauge is back within a range that stretched from about 2,040 to its all-time high of 2,130.82. It's now down 0.3 per cent in 2015.

The euro held losses against almost all of its major peers, heading for a 2.1 per cent slump in the week versus the greenback, its worst performance since July. The ECB's bond purchases, originally due to end next September, will continue until the bank sees a sustained increase in the inflation outlook, Draghi told reporters Thursday. Policy makers also discussed a further reduction in the region's already negative deposit rate, he said.

Higher-yielding currencies benefited, with the won leading gains after the GDP data. Korea's currency snapped a three-day drop, surging 1.1 per cent as it headed for a fourth consecutive week of gains. Malaysia's ringgit jumped 1.3 per cent with Prime Minister Najib Razak set to unveil the government's spending plans for the next year.

The Australian and New Zealand dollars climbed at least 0.4 per cent amid the revival in risk appetite. The yen - regarded as a haven asset along with US Treasuries - was little changed at 120.67 per US dollar, close to its weakest level in almost a month.

US crude edged 0.4 per cent higher after snapping a three- day retreat on Thursday. West Texas Intermediate futures traded at US$45.58 a barrel, on track for a 3.5 per cent decline in the week.