Tokyo, Japan (BBN)-Asian stocks rose, after the regional benchmark gauge capped its first weekly advance in seven weeks, as a stress test passed by most European banks added to signs of recovery in the region.
The MSCI Asia Pacific Index (MXAP) gained 0.5 percent to 138.22 as of 9:01 a.m. in Tokyo, the highest intraday level since October 10, before markets opened in Hong Kong and China, reports Bloomberg.
The gauge last week surged 2.9 percent after U.S. earnings beat estimates and a measure of European manufacturing unexpectedly showed expansion this month.
None of Europe’s largest banks were found lacking in the European Central Bank study.
Smaller lenders found to be deficient now have as many as nine months to fill gaps identified by the ECB, which is aiming to close the door on half a decade of financial turmoil in the euro region.
“Most people expect markets to grind out some further gains,” Donald Williams, a Sydney-based chief investment officer who helps oversee about A$1.6 billion ($1.4 billion) at Platypus Asset Management Ltd., said by phone.
“The authorities in Europe have chucked so much at the problem and will continue to flood the market with liquidity. The major issue of Europe of the past few years is old news now.”
Japan’s Topix index rose 0.6 percent and Australia’s S&P/ASX 200 Index gained 0.5 percent.
South Korea’s Kospi index advanced 0.5 percent. Markets in New Zealand are closed for a holiday.
Futures on the Standard & Poor’s 500 Index added 0.1 percent after the underlying gauge surged 4.1 percent last week.
About 79 percent of S&P 500 companies that have reported quarterly earnings this season have topped analysts’ estimates for profit, while 61 percent beat sales projections, data compiled by Bloomberg show.
Caterpillar Inc. and Yahoo! Inc. surged last week after posting better-than-expected third-quarter revenue.
CHINA GROWTH
China’s economic growth will slow to 7.3 percent in 2015, Song Guoqing, an academic member of the monetary policy advisory committee for the People’s Bank of China, said at a forum in Beijing on Oct. 25. That view contrasts with a prediction by Fan Jianping, chief economist at a state research institute, for 7 percent growth next year unless the central government imposes stronger-than-expected stimulus measures.
BBN/AS-27Oct14-12:40pm (BST)