Asia: Stocks head for best quarter since 2012; oil extends slump

[WELLINGTON] Asian stocks rallied, with the regional index headed for its biggest quarterly advance since 2012 amid optimism over global economic stimulus. The dollar maintained gains, while crude oil extended losses into a third day.

The MSCI Asia Pacific Index snapped a three-day drop, rising 0.5 per cent by 9.58am in Tokyo to be set for a 6.8 per cent advance over the past three months. Standard & Poor's 500 Index futures added 0.1 per cent following a second day of gains in the US gauge.

Japanese and Australian indexes jumped more than 0.7 per cent, with the yen and Australia's dollar near one-week lows. The South Korean won weakened 0.3 per cent. US oil slid 0.9 per cent, while gold held two days of declines.

Global equities have climbed almost 3 per cent this year as central banks from Europe to Asia bolster stimulus to address slowing growth. China announced measures aimed at stemming a property slump Monday after central bank Governor Zhou Xiaochuan said more can be done to support the economy.

The euro area, which embarked on quantitative easing this month, updates consumer prices Tuesday. Greece's bailout talks have stalled with European officials criticising their proposal.

"Investors continue to work on the expectation that the People's Bank of China will deliver more policy reports in coming months and that the U.S. Fed will be cautious about its policy deliberations," Matthew Sherwood, head of investment markets research in Sydney at Perpetual Ltd., which manages about US$21 billion, said by e-mail.

ASIAN INDEXES

Japan's Topix index climbed 0.8 per cent in a second day of gains, on track for a 12 per cent advance in the quarter, its best move since surging 20 per cent in the first three months of 2013. The yen was little changed at 120.11 per dollar after halting a three-day advance Monday, when it touched 120.23 per dollar, the weakest level since March 20.

Technology and health-care shares drove Australia's S&P/ASX 200 Index up 1.4 per cent, while the NZX 50 Index in Wellington gained 0.2 per cent. The Kospi index in Seoul advanced 0.5 per cent, set for an increase in the quarter of 6.5 per cent.

MSCI's Asia-Pacific gauge is up 0.7 per cent in March for a third straight month of gains, sending the gauge of 997 regional stocks toward its biggest quarterly increase since the first quarter of 2012. The MSCI All-Country World Index has advanced 2.8 per cent this quarter even with a 0.9 per cent drop in March.

HOUSING MARKET

Chinese property website companies climbed in the US on Monday after the PBOC said it will lower the down-payment requirement for second homes and China's finance ministry exempted homeowners from a sales tax. Officials are seeking to arrest a slide in house prices and spur growth that the government projects will deteriorate to its slowest pace in 15 years.

Policy makers have room to act with both interest rates and "quantitative" measures, Mr Zhou said Sunday.

Hang Seng Index futures in Hong Kong added 0.7 per cent in most recent trading, while contracts on the Hang Seng China Enterprises Index, which tracks mainland Chinese shares listed in the city, jumped 1.6 per cent. Singapore-traded FTSE China A50 Index futures gained 1.5 per cent after the Shanghai Composite Index soared to a seven-year high Monday.

The Aussie little changed at 76.60 US cents after a five- day slump, and neared parity with its New Zealand counterpart amid divergent outlooks for monetary policy. Australia's dollar dropped to a post-float low versus the kiwi on Monday and is set for a third quarterly loss against the greenback. The won fell to 1,108.20 per dollar, also headed for a third straight quarterly retreat.

EURO CPI

The euro was steady at US$1.0840 after sliding 0.5 per cent Monday. Greek Prime Minister Alexis Tsipras is trying to get a consensus in the country's parliament on his efforts to secure bailout funds.

A 15-page list of proposals submitted by the government requires more detail and is a long way from serving as the basis for a deal, three European officials said, asking not to be named because the talks are private.

Data on Tuesday may show consumer prices in the euro-zone fell 0.1 per cent in March, according to economists polled by Bloomberg, after sinking more than that the previous three months.

Central banks from Europe to Asia are expanding stimulus packages and easing policy to bolster their economies, while the Federal Reserve considers tightening. Chair Janet Yellen said Friday she expects US interest rates to rise this year, with subsequent increases to be gradual.

West Texas Intermediate crude slipped to US$48.27 a barrel, after falling 0.4 per cent on Monday. Brent oil fell 0.8 per cent in a third day of declines, to US$55.82 a barrel.

IRAN CONCERNS

Talks on Iran's nuclear programme resumed Monday amid speculation a deal to ease sanctions may mean a resumption of oil shipments from the OPEC producer. Iran, the fifth biggest producer in the group, could increase exports by 1 million barrels a day if international sanctions were lifted, Oil Minister Bijan Namdar Zanganeh said March 16.

Oil fell almost 50 per cent last year as the Organisation of Petroleum Exporting Countries resisted calls to cut output to maintain market share amid surging US supply. A report on American oil stockpiles, which are at a record, is due Wednesday.

Gold was little changed at US$1,187.26 an ounce after sinking 1.1 per cent in the spot market on Monday, its steepest one-day drop since March 6.

In the US, the S&P 500 capped its first back-to-back gain after a 28-day drought, the longest run since 1994.

The S&P 500 has declined 0.9 per cent in March, paring its quarterly climb to 1.3 per cent. The last decline came in the final three months of 2012.

Merger news drove advances, with Horizon Pharma Plc up 18 per cent after saying it will acquire Hyperion Therapeutics Inc, while Catamaran Corp. jumped 24 per cent after UnitedHealth Group Inc. agreed to buy it. Teva Pharmaceutical Industries Ltd is buying Auspex Pharmaceuticals Inc Energy shares also climbed, rallying 2.1 per cent following two days of declines.

Company profits probably shrunk by 5.8 per cent in the first three months, according to analyst estimates compiled by Bloomberg. Alcoa Inc unofficially kicks off the earnings season when it reports first-quarter results on April 8.

BLOOMBERG