Asian stocks held gains after data added to evidence that the Chinese economy has stabilized. The dollar weakened versus most peers and oil rallied.
The MSCI Asia Pacific Index advanced to a one-week high as China reported a 6.7 percent increase in its gross domestic product for the third quarter. A gauge of the greenback’s strength retreated for a third day as South Korea’s won led gains among major currencies. Australia’s bonds rose, dragging the 10-year yield from a four-month high. Crude oil approached $51 a barrel after industry data showed American supplies fell.
The outlook for U.S. interest rates has dominated investor sentiment of late and an end to China’s economic slowdown will give the Federal Reserve one less reason to keep monetary policy loose. The probability of the central bank raising borrowing costs this year slipped by about three percentage points to 63 percent on Tuesday as a report showed U.S. consumer prices excluding food and fuel costs rose less than forecast last month.
“China won’t do anything new in terms of policy because the economy isn’t sliding,” said Ben Kwong, a Hong Kong-based director at KGI Asia Ltd. “Under these conditions, the market doesn’t really have a direction. It needs to wait for news on U.S. rates.”
The MSCI Asia Pacific Index added 0.4 percent as of 11:18 a.m. Tokyo time, after climbing 0.9 percent in the last session. Taiwan’s Taiex index was the best-performing benchmark in the region with a 0.7 percent gain.
Sharp Corp. surged as much as 11 percent in Tokyo after Nikkei reported that the company expects to achieve an annual operating profit for the first time in three years. Betting company Tatts Group Ltd. jumped 15 percent in Sydney after agreeing to be bought by Tabcorp Holdings Ltd. in a deal valued at A$6.4 billion ($4.9 billion). Tabcorp rose 2 percent.
Futures on the S&P 500 Index added 0.1 percent after the U.S. benchmark climbed 0.6 percent from a one-month low in the last session. Goldman Sachs Group Inc. gained 2.2 percent on Tuesday after posting a 47 percent increase in earnings, while Netflix Inc. surged 19 percent after reporting a jump in subscribers. While only 57 S&P 500 members have reported results so far, 83 percent announced earnings that exceeded analysts’ estimates, according to data compiled by Bloomberg.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, declined 0.1 percent. The gauge has advanced this month amid speculation the Fed was getting closer to its first rate hike since December, prompting hedge funds and money managers to boost net bullish bets.