Asian stocks rose, extending the longest rally in the benchmark equity gauge this year, and the Thai baht and Malaysian ringgit climbed before Chinese factory output and retail sales data expected to show growth in August. Crude oil slipped for a second day and credit risk fell.
Bloomberg photo
The MSCI Asia Pacific Index advanced 0.9% to 136.73 at 11.26am in Tokyo, rising for a ninth day in its longest winning streak since December. Standard & Poor's 500 Index (SPX) futures added 0.1%. The ringgit and the baht extended gains, strengthening at least 0.4%. West Texas Intermediate oil sank 0.8%.
Chinese industrial production and retail sales reports on Tuesday will probably add to signs the world's second-largest economy is rebounding, with factory output projected to have grown at the fastest pace this year last month, according to a Bloomberg survey. Policy makers in the nine-member Bank of Japan expect the government to push measures aimed at boosting fiscal health, minutes of the last meeting released on Tuesday showed. Oil fell on speculation Russia's plan to get Syria to surrender its chemical weapons will help avert a United States strike.
"The market should be pretty positive that industrial production in China is picking up," said Evan Lucas, a Melbourne-based markets strategist at IG Ltd. "Positive indicators from China coupled with what’s going on in Japan really puts Asia back on track, making the region a very good investment case."
Bull Market
Japan's Topix Index rallied for a second day, jumping 1% and set for its highest close since Aug 6. Australia's S&P/ASX 200 Index (AS51) rose 0.4%. Marine transport provider Mitsui OSK Lines Ltd. climbed 4.6% after the Baltic Dry Index, a measure of commodity-shipping prices, posted its biggest advance in more than four years.
The Hang Seng China Enterprise Index, which is comprised of H-Shares listed on the Hong Kong Stock Exchange and included in the Hang Seng Mainland Composite Index, entered a bull market after advancing 20% from its June 25 low and gaining 1.2% Tuesday.
The Kospi Index (KOSPI) in Seoul gained 0.5%, rising for a fourth day and headed for a three-month high. Foreign investors bought a net $50 billion of Korean equities Monday, the most in one day since Feb 20, according to data from the exchange.
Ringgit, Baht
Factory output in China will expand 9.9% in August from a year earlier after rising 9.7% in July, according to the median of 45 analyst estimates in a Bloomberg survey. Retail sales probably rose 13.3% on an annual basis, from 13.2% the previous month, a separate poll before on Tuesday's data shows. A report Sept 8 fuelled gains in global stocks and emerging-market currencies after it showed Chinese exports rose more than economists expected last month.
Malaysia's ringgit climbed for a second day, adding 0.7% to 3.2698 versus the greenback while Thailand's baht gained 0.3% to 32.075 per US dollar, rising for a third day. Australia's dollar touched 92.19 US cents, the strongest since July 24, before retreating to 92.57.
One-month non-deliverable forwards on India's rupee strengthened for a fourth trading day, adding 0.8% to 64.89 per dollar. Local markets were closed for a holiday Monday. The rupee strengthened 0.7% to 65.25 a dollar last week, its first climb in four weeks.
Japan’s yen was little changed at 99.60, after slipping 0.5% Monday. The Bloomberg US Dollar Index was steady after falling 0.4% in New York.
Credit Risk
The cost of insuring corporate and sovereign bonds from non-payment declined with the Markit iTraxx Japan index retreating one basis point to 87 basis points as of 9.24am in Tokyo, Deutsche Bank AG prices show. The measure last closed lower on May 24, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan decreased five basis points to 135 as of 8.26am in Hong Kong, Australia & New Zealand Banking Group Ltd. prices show. The benchmark, which has fallen 18 basis points in the three trading days through Monday, is set to close at its lowest level since Aug 14, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.
WTI crude slipped to $108.70 a barrel, following Monday's 0.9% slide in New York. Gasoline futures lost 0.9%, while contracts on natural gas added 0.2%. Brent fell 0.7% to $112.91.
'Positive Development'
US President Barack Obama said in an interview with NBC News he is not confident that he will get congressional approval for a military strike against Syria. Obama, who will address the country on the matter tonight, said a Russian proposal to convince Syria to give up its chemical weapons is a "potentially positive development," while expressing skepticism on whether President Bashar al-Assad's government will follow through.
Syria should give up its stockpile if doing so would help avoid a US-led strike, Russian Foreign Minister Sergei Lavrov said after meeting with his Syrian counterpart in Moscow Monday. Syria "welcomes the Russia proposal," Walid al-Muallem, the country's foreign minister, told reporters.
Soybeans declined for a second day on expectations rain forecast for the Midwest will help ease crop stress in the biggest US growing region. The contract for November delivery dropped as much as 1.2% to $13.4025 a bushel on the Chicago Board of Trade. Prices have lost 4.2% this year.