SYDNEY (BLOOMBERG) - Stocks across Asia's largest markets rose, led by gains in China and Hong Kong, as speculation grew the mainland government will take more measures to stem a US$3.4 trillion market rout. Banks led Australian equities lower.
The Shanghai Composite Index climbed 2.3 per cent. China Shenhua Energy Co. surged 4.2 per cent in Hong Kong, leading gains on the Hang Seng China Enterprises Index. Australia & New Zealand Banking Group Ltd. slumped 7.5 per cent in Sydney, the most since 2008, after the lender reported profit that missed analysts' estimates and as it raises A$3 billion to shore up capital.
The MSCI Asia Pacific Index declined less than 0.1 per cent to 140.83 as of 4:02 p.m. in Hong Kong. Japan's Topix index rose 0.3 per cent after the Bank of Japan maintained loose monetary policy and investors gauged earnings results. Volume on China's mainland remains tepid as Goldman Sachs Group Inc. estimated authorities may have spent as much as 900 billion yuan in the past two months to prop up stock prices.
"People feel there's some backstop right now," Brett McGonegal, CEO of Reorient Group Ltd. told Bloomberg TV in Hong Kong. "The support has clearly been given by the government that they're going to be there. With limited downside, people will jump back in."
Authorities have introduced a series of measures to prop up share prices and crack down on market manipulation. Regulators have banned stake disposals by major shareholders, suspended initial public offerings and compelled state-run institutions to support the market with equity purchases.
China Securities Finance Corp., the government agency mandated to buy stocks to bolster the market, is seeking access to an additional 2 trillion yuan, people with knowledge of the matter said. The extra funding would add to the 3 trillion yuan already made available by the government, according to the people. The 5 trillion yuan total may change depending on market conditions, they said.
Hong Kong's Hang Seng Index added 0.7 per cent and the Hang Seng China Enterprises Index of mainland firms listed in the city gained 1.2 per cent.
Japan's central bank refrained from expanding monetary stimulus. The Bank of Japan will keep increasing the monetary base at an annual pace of 80 trillion yen, as expected by all 37 economists surveyed by Bloomberg.
South Korea's Kospi index declined 0.2 per cent and New Zealand's NZX 50 Index slipped 1 percent. Taiwan's Taiex Index slid 0.1 per cent. India's S&P BSE Sensex Index was little changed. Markets in Singapore are closed for a holiday.
Australia's banking regulator last month raised the average capital that the country's four main lenders need to hold against potential home-loan losses. It also said the banks would need to add 200 basis points of capital to be considered among the world's safest.