Asian Stocks Join Global Equity Rally as Volatility Subsides

(Bloomberg) -- Asian stocks rose, joining a global rally, as equities across the region rebounded from declines seen in the immediate aftermath of Italy’s vote against constitutional reform.

The MSCI Asia Pacific Index climbed 0.9 percent as of 9:05 a.m. in Tokyo. The Dow Jones Industrial Average rose to a record on Monday as a report showed American services industries grew in November at the fastest pace in 13 months, just one week ahead of the Federal Reserve’s policy meeting at which it is expected to increase interest rates.

Asian shares remain less than three percent higher in 2016 following two consecutive years of losses, amid uncertainty about the path for higher rates and the impact on emerging-market assets. A gauge tracking expected volatility in U.S. equities slid to a more than two-month low on Monday.

“Investors shrugged off the anti-establishment messages from the Italian referendum to drive share prices higher,” said Michael McCarthy, chief market strategist in Sydney at CMC Markets. “Attention now turns to the Fed’s interest-rate decision next week, the last listed major risk event for the year.”

Japan’s Topix index climbed 1.1 percent as the yen maintained Monday’s losses. Australia’s S&P/ASX 200 Index rose 0.5 percent. Economists project the Reserve Bank of Australia will keep the cash rate target at 1.5 percent Tuesday. South Korea’s Kospi index advanced 0.9 percent and New Zealand’s S&P/NZX 50 Index added 0.4 percent.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net. To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net, Tom Redmond