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China Stocks Lead Asia Rally on Stimulus Bets as Ringgit Weakens

Chinese shares rallied amid speculation the government will increase stimulus, helping a gauge of Asian equities extend its biggest weekly gain in almost four years. Malaysia’s ringgit retreated, while U.S. equity-index futures fluctuated after Federal Reserve Vice Chairman Stanley Fischer said there’s potential for U.S. interest-rates to rise by year end.

The Hang Seng China Enterprises Index climbed for a seventh time in eight days, while the Shanghai Composite Index headed for its highest close in seven weeks. The MSCI Asia Pacific excluding Japan Index, which jumped 6.5 percent last week, added 0.5 percent. Standard & Poor’s 500 Index futures were little changed. The ringgit slid after its biggest weekly surge since 1998, while Turkey’s lira dropped after a deadly terror attack. U.S. oil traded near $50 a barrel.

The Shanghai Composite Index is rallying amid stimulus speculation following the National Day holidays.

Fischer said Sunday that while the U.S. economy may be strong enough to withstand a rate increase by the end of 2015, policy makers are monitoring labor conditions and the situation internationally as they mull when to pull the trigger. Riskier assets surged last week as the Fed’s caution, combined with evidence of slowing growth in other major economies, spurred speculation that central banks globally won’t be able to rein in stimulus any time soon. U.S. Treasuries won’t trade Monday.

“If the Fed does decide to hike in October or December then the U.S. dollar is at risk of appreciating,” said Janu Chan, a senior economist in Sydney at St George Bank, a division of Westpac Banking Corp. “Markets are still putting a low probability of a rate hike this year.”

Fischer joined other Fed officials, including Chair Janet Yellen, in raising the prospect of policy tightening by the end of this year, with Atlanta Fed President Dennis Lockhart saying Friday that he still anticipates raising rates in 2015. Despite the rhetoric, traders put the odds of an increase this year at below 40 percent, after weaker-than-expected September payrolls data fueled concern the labor market recovery is stalling.

Stocks

The Hang Seng China Enterprises Index advanced 1.3 percent by 1:36 p.m. in Hong Kong, helping to drive the MSCI Emerging...


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