NEW YORK, June 27 – Asian stocks rose for a second day, extending a global rebound, as investors speculated the Federal Reserve may hold back from reducing monetary stimulus and Chinese money-market rates decreased. South Korea’s won strengthened, while gold advanced.

The MSCI Asia Pacific Index gained 1.7 per cent at 12.14pm in Tokyo, trimming its June decline to 4.8 per cent. South Korea’s Kospi index surged the most since September. Futures on the Standard & Poor’s 500 Index added 0.1 per cent. The cost of locking in China’s interest rates fell for a fifth day. The Dollar Index halted its longest stretch of gains since May 2012, while the won rose against most of its major peers. Gold added 0.8 per cent.

The US revised lower its reading for first-quarter economic growth, while German consumer confidence is set to increase next month. Global equities have lost 3.7 per cent in June, trimming this year’s advance to 4.1 per cent, as the Federal Reserve said it might pare asset purchases that had fuelled gains, and investors speculated that rising Chinese funding costs would curb growth in Asia’s largest economy.

“Central bank statements have combined with some softish data to remind people that the US recovery remains the weakest in history and that policy action is not imminent,” Matthew Sherwood, the Sydney-based head of investment market research at Perpetual Ltd., which manages about US$25 billion (RM79.9 billion), said by e-mail. “The risk of tapering has not gone away.”

Stocks climb

More than six stocks rose for each that fell in MSCI’s Asian index, led by gains in technology and telecommunication companies. Japan’s Topix index, Australia’s S&P/ASX 200 Index and Hong Kong’s Hang Seng Index climbed at least 1.3 per cent. The Shanghai Composite Index advanced 0.4 per cent from its lowest level in more than four years, trimming its loss for June to 15 per cent.

Chinese companies have dropped out of the ranks of the world’s 10 biggest stocks by market value for the first time since 2006 amid the cash crunch, slower growth and the biggest US stock rally in a decade. PetroChina Co., the state oil producer that was the world’s sixth-biggest company in May, lost US$35 billion in market value this month to US$214 billion, dropping to 12th, according to data compiled by Bloomberg based on closing prices yesterday.

Korea’s Kospi puts a stop to its decline. – AFP file pic

South Korea’s Kospi jumped 2.9 per cent, paring its decline this month to 8.3 per cent. The Kospi 200 Volatility Index sank 11 per cent today, after climbing over the past six days. Samsung Electronics Co. surged 5.6 per cent as its shares rose for the first time in seven days.

Quarterly moves

The S&P 500’s advance trimmed its June decline to 1.7 per cent. The index is up 2.2 per cent in the second quarter and 12 per cent in 2013. MSCI’s Asia Pacific gauge is down 0.8 per cent in 2013 and 5.3 per cent in the second quarter, while the MSCI World Index of developed nations boosted its 2013 advance over the past three days to 6.8 per cent.

Gross domestic product for the US expanded at a revised 1.8 per cent annualised rate from January through March, down from a prior estimate of 2.4 per cent, figures from the Commerce Department showed yesterday in Washington. Household purchases, which account for about 70 per cent of the economy, were revised to a 2.6 per cent advance compared with the 3.4 per cent gain estimated last month.

Federal Reserve Bank of Richmond president Jeffrey Lacker said he expected the US expansion to remain “sluggish” for “a couple more years”, and yesterday’s downward revision to first-quarter growth is in line with his outlook. Lacker said he saw growth of about 2.25 per cent next year.

Fed stimulus

Fed chairman Ben S. Bernanke said last week that the central bank might curb bond buying aimed at supporting growth this year and end the so-called quantitative easing program in 2014 should risks to the US economy continue to abate and growth is in line with Fed projections.

The Dollar Index, which measures the US currency against six major peers, snapped a six-day climb to retreat 0.2 per cent today, cutting its advance to 3.8 per cent in 2013. The won strengthened 0.5 per cent to 1,149.05 per dollar.

The so-called Aussie added 0.4 per cent to 93.11 US cents, appreciating for a fifth day. Kevin Rudd, Australia’s former prime minister, ousted Prime Minister Julia Gillard yesterday as leader of the nation’s Labor Party before elections scheduled for September. Rudd, new Treasurer Chris Bowen and incoming deputy leader Anthony Albanese were sworn in by Governor General Quentin Bryce today, according to an e-mailed statement.

Euro

The yen slid 0.1 per cent to 97.78 per dollar and lost 0.2 per cent to 127.43 versus the euro. Japan’s currency has strengthened 2.7 per cent against the greenback in June and weakened 3.6 per cent in the quarter. The yen will end 2013 at 105 per dollar, according to the median strategist forecast compiled by Bloomberg.

The euro added 0.2 per cent to US$1.3033 after weakening below US$1.30 yesterday for the first time in almost a month. European Central Bank president Mario Draghi said monetary policy would remain stimulative, curbing the allure of euro-denominated assets.

European Union finance chiefs forged an agreement on how to handle failing banks in the region, German Finance Minister Wolfgang Schaeuble told reporters. German consumer confidence would rise to 6.8 next month from 6.5 in June, Nuremberg-based research company GfK SE said yesterday.

Currency volatility

The JPMorgan Global FX Volatility Index rose to 11.48 per cent after touching 11.96 per cent June 24, the highest level since June 2012. The average for 2013 is 9.2 per cent.

Gold gained 0.8 per cent to US$1,236.80 an ounce after prices slid in New York. The precious metal was headed for a quarterly drop of 23 per cent, the most since at least 1920, according to data compiled by Bloomberg. Silver rose 1.3 per cent, retracing some of yesterday’s 5.6 per cent slump. Platinum increased 1.1 per cent, while palladium added 1.4 per cent.

West Texas Intermediate oil added 0.5 per cent to US$95.97 a barrel.

China’s one-year interest-rate swap, the fixed cost needed to receive the floating seven-day repurchase rate, fell eight basis points to 3.83 per cent. It reached an all-time high of 5.06 per cent on June 20 and rose 54 basis points this month, the most since January 2011.

The People’s Bank of China has provided liquidity to some financial institutions to stabilise money-market rates, according to a June 25 release.

“It takes pains to get through the liquidity crunch, but it also paves the way for future gains,” the official Xinhua news agency said in a commentary last night. “For the blessing of a more sustainable economy, banks are the first, but certainly not the last to suffer the hardship.” – Bloomberg