Asian markets continue recovery albeit slowly

Asian stocks advanced for a second day as Greece moved closer to addressing its issues. Meanwhile the won climbed and default risk dropped.The MSCI Asia Pacific Index continued its upward trend and added 0.6%. Shares are extending a rebound from a three-month low before a statement from the Federal Reserve that may help investors assess the outlook for interest rates and the U.S. central bank’s record stimulus efforts.

Malaysia announced plans to start selling an Islamic dollar sovereign bond tomorrow to raise as much as $2billion, its second Shariah-compliant global offering in a year, two people familiar with the matter said. The sale will be split into two portions of five- and 10-year maturities. Over in India, the government is taking fewer policy decisions than at any stage in at least the last six years after a minister, bureaucrats and company officials were jailed over corruption charges.

About three shares gained for every one that fell on MSCI’s Asia Pacific Index. The measure has added 1.5% since completing a seventh weekly loss on June 17, the longest slump since 2004. Japan’s Nikkei 225 Stock Average jumped 1.3% and Australia’s S&P/ASX 200 Index rallied 0.6%. South Korea’s Kospi Index increased 0.8% and Taiwan’s Taiex index rose 0.6% even after MSCI Inc. left the two as emerging markets following a review. The index compiler also delayed a decision until December on whether to raise the United Arab Emirates and Qatar to emerging-market status from its frontier classification.

In corporate news, Australian airline icon Qantas said underlying profit before tax will range between $500-$550m. This compares with consensus earnings estimates of around $550m so the downgrade, although disappointing, is not large at all on face value. Elsewhere, global airport owner Macquarie Airports said it entered into exclusive negotiations to potentially swap assets with Ontario Teachers’ Pension Plan Board. Under the proposal, MAP will divest its non-controlling interests in Brussels and Copenhagen Airports in exchange for Ontario’s 11.02% holding in Sydney Airport, together with a net cash payment of A$850m to MAP.

PetroChina walked away from what would have been its biggest overseas acquisition, the C$5.4billion ($5.5 billion) purchase of natural-gas assets in Canada, after failing to agree on price. Asia’s largest energy producer and Encana Corp. were unable to reach a final accord because of differences over asset valuation, Mao Zefeng, a Beijing-based PetroChina spokesman said. 

In commodities, gold for immediate delivery gained as much as 0.3% to $1,550 an ounce, the highest since June 6. The metal was little changed at $1,547 an ounce at 10:11 a.m. in Singapore. Silver for immediate-delivery was little changed at $36.36 an ounce. Spot palladium fell 0.2% to $767 an ounce and cash platinum gained 0.3% to $1,752 an ounce.