Asia Stocks Extend Global Gains; Crude Drops With Dollar

(Bloomberg) — Asian stocks extended a six-month high after global equities capped their biggest weekly advance since July 2013. The dollar declined with crude.

The MSCI Asia Pacific Index rose a fifth straight day, adding 0.8 percent by 2:02 p.m. in Tokyo as China’s Shanghai Composite Index headed for its longest streak of gains since 2007. Standard & Poor’s 500 Index futures climbed 0.2 percent. The Bloomberg Dollar Spot Index extended a two-week low, with the greenback losing 1 percent against New Zealand’s currency. U.S. oil fell 1.1 percent as Saudi Arabia said it was pumping near record amounts of crude.

The value of global equities rose to a record $ 68.4 trillion on March 20 as investors bet shares will benefit from delayed Federal Reserve interest-rate increases and record central-bank stimulus in Europe and Japan. Three Fed members speak Monday after policy makers lowered their rate outlook, sending the dollar to its worst week since 2011. Greek Prime Minister Alexis Tsipras is set to meet German Chancellor Angela Merkel on Monday as he seeks to salvage a bailout deal.

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“The overriding factor for the Fed is whether they can afford to overstimulate the economy or raise rates too soon,” Tim Schroeders, a portfolio manager who helps oversee about $ 1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “They can’t be too aggressive in raising rates as the underlying U.S. economy isn’t as strong. Equities will continue to trend higher but as valuations become stretched, markets will be more vulnerable to a pullback.”

Stock Moves

The MSCI All-Country World Index capped a 3.2 percent gain last week, its steepest advance since July 2013. The measure is up 7 percent over the past year as policy makers from Europe to Japan expand stimulus programs to stave off deflation and preserve growth. Their actions have helped counter the impact of the Fed, which has wound down its own quantitative-easing program and indicated it’s headed for a rate increase.

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Both the Nasdaq Composite Index and the Stoxx Europe 600 Index came within 0.5 percent of record highs last week. Fed officials said in their statement that they’ll be waiting for confidence in the recovery before boosting borrowing costs.

Hong Kong’s Hang Seng Index climbed 0.6 percent Monday and the Hang Seng China Enterprises Index was 0.4 percent higher. The Shanghai Composite Index advanced 1.8 percent from its highest close since 2008. The gauge is heading for a ninth straight gain even after China’s securities regulator urged investors to consider risks from the nation’s surging stock market.

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Kospi, Nasdaq

Australia’s S&P/ASX 200 Index was the only major benchmark gauge in Asia to decline today. The NZX 50 Index in Wellington and the Kospi index in Seoul rose 0.1 percent.

The Nasdaq Composite advanced for a fifth straight day Friday, gaining 0.7 percent to 5,026.42. The rally put the technology-heavy index within seven points of wiping out all its losses since the Internet bubble and came in the same week as Apple Inc., the Nasdaq Composite’s biggest member, entered the the Dow Jones Industrial Average.

In currency markets, the kiwi strengthened to 76.4 U.S. cents, while the Australian dollar rose 0.6 percent to 78.21 U.S. cents. South Korea’s won climbed 0.7 percent against the greenback, while the Malaysian ringgit added 1.4 percent.

The Bloomberg dollar index slipped 0.1 percent after losing 1.3 percent Friday to cap a slump of 2.2 percent for the week, the biggest since October 2011. The gauge of the U.S. currency against 10 major peers was at a decade high as recently as March 13.

Singapore’s dollar rallied with its Asian peers, gaining 0.2 percent to S$ 1.3767 per dollar. The Southeast Asian state declared a week of national mourning after the death of Lee Kuan Yew, its first elected prime minister. Lee, who was 91, helped transform Singapore from a colonial trading center into one of the region’s most prosperous countries in his 31 years at the helm.

Treasury Yields

Yields on 10-year Treasury notes were little changed Monday after tumbling 18 basis points last week to 1.93 percent.

Fed Vice Chairman Stanley Fischer speaks at the Economic Club of New York on Monday, while San Francisco Fed President John Williams will deliver a speech via videoconference to the Australian Business Economists. Cleveland Fed President Loretta Mester speaks on a panel discussion titled in Paris with with Bank of France Governor Christian Noyer.

European leaders, including Merkel, French President Francois Hollande and European Central Bank President Mario Draghi pressed Tsipras to make good on a February accord and “present a full list of specific reforms” in the coming days before any further aid can be disbursed.

Crude Production

West Texas Intermediate crude dropped to $ 46.01 a barrel after its first weekly increase in five weeks. Oil has been on the brink of both bull and bear markets this year as a declining rig count in the U.S. is countered by data showing the nation’s stockpiles are at a record high. Brent was down 0.8 percent at $ 54.90 a barrel.

Saudi Arabia’s Oil Minister Ali al-Naimi said at the weekend that the world’s biggest crude-exporting nation is pumping about 10 million barrels of oil a day, close to a record amount produced in 2013. Mohammed al-Madi, the Saudi governor to OPEC, said oil prices won’t return to $ 100 a barrel because higher prices would draw more shale and output from higher-cost producers to the market.

To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Nick Gentle in Hong Kong at ngentle2@bloomberg.net

To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net Sarah McDonald

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