Asian stocks climb from six-month low on Fed outlook, U.S. data

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SINGAPORE (Oct 17): Asian stocks rose from a six-month low after a Federal Reserve official said the central bank should consider delaying the end of bond purchases and U.S. data eased concern over the global economy.

The MSCI Asia Pacific Index climbed 0.1 percent to 134.93 as of 9:01 a.m. in Tokyo after closing yesterday at the lowest since March 25. The gauge is heading for a sixth straight weekly decline as faltering recoveries in China and Europe spark concern global economic growth will slow and the Fed considers when to raise interest rates.

“Markets in Europe, Australia and Japan are looking attractive,” said Steven Milch, Sydney-based chief economist at Suncorp Group Ltd. “I don’t think the fundamental picture has changed significantly. U.S. data overnight was pretty good. The Fed needs to balance what is clearly a strong economy against some of this financial market volatility.”

Futures on the Standard & Poor’s 500 Index added 0.3 percent. The gauge was little changed yesterday after erasing a drop of as much as 1.5 percent.

St. Louis Fed Bank President James Bullard said the central bank should consider delaying the end of its bond buying to halt the decline in inflation expectations. Reports yesterday showed production at U.S. factories rebounded, claims for jobless benefits fell to a 14-year low and households held the most optimistic views in two years, signs the world’s largest economy is overcoming a global slowdown.

“The Bullard comments were a short-term shot of adrenaline,” Chad Morganlander, a money manager at St. Louis- based Stifel Nicolaus & Co., which oversees about $160 billion, said in a telephone interview. “The U.S. economy is doing quite well, yet there’s overall concern that the euro zone is falling into the abyss.”

European Slump

European stocks fell to this year’s low yesterday, with the benchmark index posting its longest slump in 11 years, as concern grew that a financial crisis is returning to the region’s so-called peripheral nations. Even so, the Stoxx Europe 600 Index trimmed a decline of as much as 2.9 percent after Bullard’s comments and ended the day down 0.4 percent.

Japan’s Topix index increased 0.1 percent today as the yen held declines against the dollar. South Korea’s Kospi index gained 0.2 percent. New Zealand’s NZX 50 Index climbed 0.3 percent. Australia’s S&P/ASX 200 Index added 0.3 percent. Markets in China and Hong Kong have yet to open.

Student leaders of Hong Kong’s protests for democracy agreed to talks proposed by Chief Executive Leung Chun-ying while vowing to remain in the streets. The protesters, whose numbers have swelled to as many as 200,000 people in the past three weeks, are demanding that China reverse a ruling that candidates for the election of Leung’s successor in 2017 be vetted by a committee. Leung said yesterday that the decision wasn’t negotiable.