Hong Kong stocks rose, with the benchmark index snapping its longest losing streak in almost a year, as Morgan Stanley upgraded the outlook for Hong Kong stocks and amid speculation that the Chinese government may widen the yuan’s trading band within the next three days.
Morgan Stanley, previously the most bullish brokerage on Japanese stocks, says the Topix Index will fall about 10 percent as investors await corporate earnings and progress on promised economic reforms.
China’s stocks rose the most in two months before a report that may show manufacturing expanded and as Market Studies LLC’s Tom DeMark said Shanghai’s equity index will rally as much as 28 percent by September.
Most Asian stocks declined amid concern that Cyprus’s rejection of a bailout plan shows Europe will struggle to contain its debt crisis. The losses were limited as Chinese shares rallied ahead of report that may show manufacturing expanded this month.
Emerging-market stocks tumbled to the lowest level in three months, led by Russian equities, as Europe’s bailout of Cyprus sparked concern over more financial turmoil. Currencies weakened and borrowing costs climbed.
Hong Kong stocks rose for the first time in four days as a rally among mainland Chinese shares in the city offset investor concerns that Cyprus’s rejection of a bailout plan shows Europe will struggle to contain its debt crisis.