Asian Equities Have Best Week Since April on Stimulus Optimism

(Bloomberg) -- Asian stocks climbed, with the regional benchmark index having its biggest weekly gain since April, as central banks signaled looser monetary policies to blunt the impact of Britain's decision to leave the European Union.

The MSCI Asia Pacific Index rose 0.6 percent to 129.62 as of 4 p.m. in Singapore and advanced 3.5 percent over the past five days as the region's equities rebounded from losses caused by the U.K.'s shock vote last week. Governor Mark Carney signaled the Bank of England could cut interest rates within months to shield the British economy, while the European Central Bank is considering loosening the rules for its bond purchases to ensure enough debt is available to buy, according to euro-area officials familiar with the matter.

“Markets are reacting positively to the supportive interest rate environment,” Chris Green, the Auckland-based director of economics and strategy at First NZ Capital Group Ltd., said by phone. “With interest rates remaining low for longer, the concern is what policy options are left for central banks if we see an even softer patch for the global economy.”

Japan's Topix index added 0.7 percent, capping its biggest weekly advance since April. The yen gradually pared gains as speculation grows for further easing after the country's top policy makers and the Bank of Japan expressed concern over the tumult in financial markets. The country's consumer prices continued to slide in May, putting more pressure on the Bank of Japan to expand monetary stimulus at its meeting later this month.

China Rally

China's stocks capped their biggest weekly gain in a month after official manufacturing data matched forecasts and a gauge of services activity perked up. The Shanghai Composite Index rose 0.1 percent, taking this week's advance to 2.7 percent and erasing losses sparked by the U.K. referendum.

The Philippine Stock Exchange Index gained 0.4 percent, bringing its weekly advance to 2.6 percent and also erasing Brexit-related losses. The nation's equities are at the highest in more than a year on optimism Rodrigo Duterte, who took office as president on Thursday, will speed infrastructure development.

Taiwan's Taiex gained 0.8 percent after the nation's central bank lowered its benchmark interest rate late Thursday in a widely expected decision as the export-dependent economy's growth prospects remain under pressure.

South Korea's Kospi index rose 0.9 percent, Australia's S&P/ASX 200 Index gained 0.3 percent and New Zealand's S&P/NZX 50 Index increased 0.4 percent. Singapore's Straits Times Index fell 0.1 percent, paring this week's advance to 3.7 percent. Markets in Hong Kong and Thailand were shut for holidays.

Bull Market

The Jakarta Composite Index slipped 0.7 percent, paring this week's gain to 3.1 percent. The gauge entered a bull market this week after the passing of a tax amnesty bill that's forecast to lure more than $40 billion of undeclared money back to Indonesia.

Nitori Holdings Co. jumped 7.9 percent in Tokyo after the discount furniture retailer reported a 31 percent increase in quarterly operating profit and Nomura Holdings Inc. raised its price target. Sysmex Corp. climbed 5.3 percent after the medical equipment maker raised its stake in Riken Genesis Co. as it seeks to expand into genetic research. Newcrest Mining Ltd., Australia's largest gold producer, rose 4.4 percent in Sydney as the precious metal headed for a fifth weekly advance.

Futures on the S&P 500 Index lost 0.3 percent. The U.S. equity benchmark index climbed 1.4 percent on Thursday after jumping 3.5 percent in the previous two sessions. The gauge finished the quarter up 1.9 percent and erased a June decline in the final minute of trading.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net, Tom Redmond, Andrew Janes