Asian Stocks Rise as Bond Risk Falls; Won to Gold Climb

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Asian stocks rose a fourth day and bond risk in the region fell as U.S. lawmakers continued talks on raising the nation’s debt limit to avoid a default. Nickel and gold climbed with emerging-market currencies.

The MSCI Asia Pacific Index added 1.3 percent by 12:57 p.m. in Tokyo, set for the longest rally in a month, as Japan’s Topix jumped 1.8 percent. Standard & Poor’s 500 Index futures were up 0.1 percent. The cost of insuring Asia-Pacific bonds from non-payment declined to the lowest in about three weeks. The South Korean won and Malaysian ringgit gained for a second day. Gold climbed 0.4 percent as zinc and nickel rose at least 0.3 percent. Crude fell 0.2 percent after rallying yesterday.

The S&P 500 index jumped the most since Jan. 2 and Treasury bill rates dropped yesterday on optimism an agreement will be reached to raise the U.S. debt ceiling before an Oct. 17 deadline. Talks between Republican lawmakers and President Barack Obama will continue as they try to seek a “path forward,” according to Republican House Majority Leader Eric Cantor. The White House said “no specific determination was made” during an initial 90-minute meeting in Washington.

“Both sides are trying to step away from that cliff next week,” said Stephen Halmarick, the Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about A$170 billion ($161 billion). “People are assuming there will be some resolution before the 17th, but there’s clearly a long way to go.”

Stock Moves

More than five stocks rose for each that fell on MSCI’s Asian index, which is headed for a 1.4 percent climb this week.

Toyota Motor Corp., Asia’s biggest carmaker, rose 1.1 percent in Tokyo. Westpac Banking Corp. gained 2.3 percent in Sydney after agreeing to buy Lloyds Banking Group Plc’s assets in Australia.

South Korea’s Kospi index added 1.2 percent, Australia’s S&P/ASX 200 Index jumped 1.5 percent, and Hong Kong’s Hang Seng Index climbed 1.3 percent.

Obama didn’t accept or reject House Republicans’ plan to increase the debt limit and both sides described the most recent talks as constructive. Lawmakers risk a U.S. default should they be unable to agree on a way to raise the $16.7 trillion debt ceiling before the country’s borrowing authority runs out Oct. 17.

Won, Ringgit

The won appreciated 0.3 percent to 1,070.21 per dollar, while the ringgit climbed 0.4 percent to 3.1792 versus the greenback. Thailand’s baht rose 0.3 percent to 31.303 per dollar. The yen declined 0.3 percent to 98.43 per dollar, retreating for a fourth day.

The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major peers, was little changed today and is headed for its first weekly gain since August, adding 0.4 percent.

The rate on $120 billion in U.S. Treasury bills due Oct. 17 dropped for the first time in six days yesterday, sliding 17 basis points, or 0.17 percentage point, to 0.31 percent yesterday, according to Bloomberg Bond Trader prices. Rates on the bills rose six basis points to 0.37 percent in trading today.

Yields on 10-year Treasury notes were little changed at 2.68 percent today, after gaining two basis points yesterday.

A U.S. Treasury Department report Oct. 3 said consequences would be “catastrophic” should the U.S. default. Treasury Secretary Jacob J. Lew said yesterday that “uncertainty” over the debt limit is starting to stress financial markets.

Credit Risk

Claims for U.S. jobless benefits jumped last week to the highest level in six months, Labor Department data yesterday showed, providing the first statistical warning that damage from the shutdown is starting to ripple through the economy.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined 4 basis points to 142, Australia & New Zealand Banking Group Ltd. prices show. The gauge is set for its lowest close since Sept. 23, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

Zinc for three-month delivery on the London Metal Exchange gained to $1,900 a metric ton, set for the highest close since Sept. 30. Nickel increased 0.4 percent and gold climbed to $1,292.36 an ounce.

WTI crude decreased to $102.77 a barrel, after climbing 1.4 percent yesterday following the detention and subsequent release of Libya’s prime minister. Brent futures lost 0.2 percent, while contracts on natural gas gained 0.7 percent today.

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