Asia Stocks Rise Toward Six-Year High as Hong Kong Gains

Asian stocks advanced, with the regional benchmark index on course for its highest close in six years, as investors bet rising tensions in Ukraine over the shooting down of a jetliner won’t curb global economic growth.

Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal, jumped 4.9 percent as mainland stocks listed in Hong Kong led gains. All 10 industry groups on the regional gauge rose. Kangwon Land Inc., a South Korean casino and hotel services provider, surged 3.5 percent. Oriental Land Co. slipped 1.7 percent after the Nikkei reported profit at the operator of Tokyo’s Disney resort will fall.

The MSCI Asia Pacific Index (MXAP) gained 0.6 percent to 147.71 as of 12:17 p.m. in Hong Kong, set for the highest close since June 2008. More than two shares climbed for each that fell. European Union foreign ministers meet today over whether to extend penalties against Russia amid outrage over the downing of Malaysia Airlines flight MH17 over Ukraine.

“Markets will start ignoring what’s happening in terms of geopolitics,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $131 billion. “As sad as it sounds and as tragic the shooting of the plane and loss of life, the broad impact of economic activity is likely to be quite minimal. The broader focus in markets is likely to be economic fundamentals and the earnings season.”

Regional Gauges

Hong Kong’s Hang Seng Index added 1.2 percent and the Hang Seng China Enterprises Index (HSCEI) of mainland Chinese stocks traded in the city rose 1.8 percent. Aluminum Corp. of China, known as Chalco, advanced 4.9 percent to HK$3.24. The Shanghai Composite Index gained 1 percent.

Japan’s Topix index rose 0.9 percent. South Korea’s Kospi index (KOSPI) added 0.3 percent as Kangwon Land rose 3.5 percent to 34,200 won. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index lost less than 0.1 percent. Taiwan’s Taiex Index gained 0.4 percent and Singapore’s Straits Times Index added 0.1 percent.

Futures on the Standard & Poor’s 500 Index (SPX) added less than 0.1 percent after the benchmark index slipped 0.2 percent yesterday.

The U.S. equity gauge closed last week near a record high and the MSCI Asia Pacific Index this month reached the highest level since June 2008 as economic reports showed Chinese growth stabilizing and earnings at Citigroup Inc. (C) and Intel Corp. buoyed investor optimism.

Relative Value

The MSCI Asia Pacific Index traded at 13.5 times estimated earnings at the last close compared with 16.6 for the S&P 500, according to data compiled by Bloomberg.

Russia is locked in its worst diplomatic crisis with the U.S. and its allies since the end of the Cold War. Already sanctioned for his decision to annex Crimea in March, Russian President Vladimir Putin is now facing the prospect of further penalties after the U.S. indicated it believes the Russian military supplied Ukrainian rebels the missile that downed flight MH17 last week.

The United Nations Security Council voted unanimously yesterday to approve a resolution calling for an international probe into the incident, unimpeded access to the crash site and an end to military operations around the wreckage.

Oriental Land sank 1.7 percent to 18,545 yen. The Nikkei reported that the company’s first-quarter profit fell 20 percent to about 20 billion yen ($197 million) as customers spent less during visits to the company’s Tokyo Disney resorts.