Asian stocks rose for a third day, with the benchmark index extending a two-week high, after China vowed to carry out the broadest expansion of economic freedoms since at least the 1990s.
China Mengniu Dairy Co. jumped 4.8 percent after policy makers said they would relax the nation’s one-child policy, boosting the outlook for infant-formula producers. Citic Securities Co. surged 13 percent in Hong Kong, leading gains among Chinese brokerages as the government flagged policy changes that portend the end of a ban on mainland initial public offerings. Dwango Co. soared 17 percent in Tokyo after jumping by the daily limit on Nov. 15, when the provider of content for mobile phones said Nintendo Co. bought a stake in the company.
The MSCI Asia Pacific Index added 1.1 percent to 143.05 at 9:44 p.m. in Tokyo today, reaching the highest level since Oct. 30. All 10 of the measure’s industry groups gained. China pledged to allow more private investment in state-controlled industries, ease its family-planning policy and expand farmers’ land rights, according to a Communist Party policy decision published by Xinhua News Agency on Nov. 15.
“The investors who were on the sidelines don’t have to hesitate anymore,” Zeng Xianzhao, an analyst at Everbright Securities Co. in Chongqing, said by phone today. “In the next few years, we will see faster implementation of these reforms and the efficiency of the enterprises will improve as well. There were noises about possible disappointment at the plenum; this got rid of all such negative rumors.”
Hong Kong’s Hang Seng Index soared 2.7 percent on volume 192 percent higher than the 30-day average. The HSI Volatility Index, which measures the cost of options on the Hong Kong equity gauge, jumped 11 percent today, the biggest advance since Sept. 30. The Hang Seng China Enterprises Index of mainland companies listed in the city surged 5.7 percent, the steepest daily advance since December 2011. China’s Shanghai Composite Index added 2.9 percent.
Chinese shares are on the cusp of a historic bull run, according to a research note from Jefferies Group LLC. Comprehensive reform decisions from the plenum impressed “tremendously,” with a significance rivaling that of Deng Xiaoping declaring the opening of China in 1978, analysts led by Christie Ju wrote.
Japan’s Topix (TPX) index added 0.2 percent as financial shares advanced. The Nikkei 225 Stock Average was little changed after jumping 7.7 percent last week, the steepest rally in almost four years. Japanese stocks are poised to surpass this year’s high set in May as a stronger U.S. economy weakens the yen and Prime Minister Shinzo Abe’s reflation policy leads to wage increases, according to BNP Paribas Investment Partners SA and SMBC Nikko Securities Inc.
South Korea’s Kospi index climbed 0.3 percent as data showed the nation’s producer prices fell 1.4 percent last month from a year earlier. Taiwan’s Taiex Index rose 0.2 percent and Singapore’s Straits Times Index gained less than 0.1 percent. Australia’s S&P/ASX 200 Index dropped 0.3 percent, while New Zealand’s NZX 50 Index lost 0.4 percent.
Following the announcement of China’s policy changes, infant-formula makers, milk producers and sellers of other baby-related products surged. China Mengniu soared 4.8 percent to HK$35.10 and Yashili International Holdings Ltd., which makes dairy products, jumped 9.7 percent to HK$5.20. Milk-powder company Biostime International Holdings Ltd. climbed 6.5 percent to HK$68.40.
Brokerages gained as policy makers will seek to “push forward reform for a registration system” on IPOs, according to a Nov. 15 statement posted on the Chinese government’s website.
Citic Securities, China’s largest brokerage by market value, surged 13 percent to HK$18.74 in Hong Kong. Haitong Securities Co., the nation’s second-biggest brokerage, jumped 11 percent to HK$12.96.
Futures on the Standard & Poor’s 500 Index advanced 0.1 percent. The gauge of U.S. stocks rose 1.6 percent last week to close at an all-time high after Janet Yellen, nominated to succeed Ben S. Bernanke as Federal Reserve chairman, said she would take care not to withdraw stimulus too early from an economy that is operating well below potential.
“They are not willing to move yet on tapering,” said Evan Lucas, Melbourne-based market strategist at IG Ltd. “That’s a positive thing for risk and that means equities are going to be in the green.”
Among other stocks that gained, Dwango soared 17 percent to 2,638 yen after Nintendo bought 612,200 Dwango shares, according to a statement filed with the Tokyo Stock Exchange on Nov. 15. Nintendo acquired the stake at the request of Dwango Chairman Nobuo Kawakami for his personal funding needs, Nintendo spokesman Yasuhiro Minagawa said. Nintendo lost 0.2 percent to 13,040 yen after adding 5.2 percent on Nov. 15.
The Asia-Pacific gauge traded at 14 times estimated earnings, compared with 16.2 for the S&P 500 and 15.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
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