Global Stock Rally May Withstand Japan Disaster as Economic Growth Tops 4%

Stocks in Japan are poised to fall when trading resumes today while investors said that barring a nuclear disaster, the country’s worst earthquake on record is unlikely to halt the two-year bull market in global equities.

The Nikkei 225 Stock Average will slide about 2 percent when trading begins, futures show. Lost production from the Tohoku region where the quake struck might not be enough to spur a recession, Bank of America Corp. said. Bank of Japan Governor Masaaki Shirakawa told reporters he’s ready to unleash “massive” liquidity starting this morning in Tokyo to assure financial stability.

“The purely economic consequences will be modest: some reconstruction, some more government spending,” said Charles de Vaulx, a manager at New York-based International Value Advisers LLC, where he co-manages the $1.8 billion IVA International Fund including Japanese stock. “No major international consequences, either, except maybe helping drive long-term rates higher. We do not expect to make any significant changes to our portfolio as a result of this tragedy.”

The fastest global economic growth since 2007 and record U.S. profits that helped spur the 95 percent rally in the MSCI All-Country World Index of 45 nations should be intact, investors said. While the quake adds to concerns such as violence in Libya and Europe’s debt crisis, shares may benefit from reduced inflation expectations as damage to oil refineries curbs demand for crude.