Asian Stocks Rally as Growth in U.S. Retail Eases Concern

Asian stocks rose, led by commodity producers and banks, as the International Monetary Fund raised its global economic growth forecast and a U.S. trade group said the country’s retail sales grew the fastest in four years.

BHP Billiton Ltd. rose 2 percent in Sydney on higher oil and copper prices. Honda Motor Co. and Canon Inc., which get more than a quarter of their revenue from the Americas jumped at least 3 percent. NEC Corp. advanced 2.2 percent in Tokyo after saying it aims to double its share of the world’s supercomputer market in the next four years. HSBC Holdings Plc, Europe’s biggest lender by market value, climbed 2.5 percent in Hong Kong as investors speculated European banks will pass stress tests.

“I doubt we’ll have another global recession,” said Masayuki Kubota, a fund manager at Tokyo-based Daiwa SB Investments Ltd., which oversees about $51 billion in assets. “People are very sensitive to economic data from the U.S. If something good comes out, market sentiment easily rebounds. I’m buying sectors which were sold on excessive pessimism.”

The MSCI Asia Pacific Index rose 1.8 percent to 115.32 as of 7:20 p.m. in Tokyo. The gauge has slumped 11 percent from its high this year on April 15 on concern Europe’s debt crisis and Chinese steps to curb property prices will hurt global growth. Companies in the gauge trade at 14 times estimated earnings, near the lowest level since December 2008.

Australia’s S&P/ASX 200 Index climbed 2.4 percent after a statistics bureau report showed employers added workers in June for a fourth straight month, supporting the central bank’s view that the nation’s economy is strengthening.

S&P 500 Rallies

Japan’s Nikkei 225 Stock Average gained 2.8 percent, while the Kospi index added 1.4 percent in Seoul. Hong Kong’s Hang Seng Index climbed 0.9 percent. New Zealand’s NZX 50 Index rose 0.8 percent.

Futures on the Standard & Poor’s 500 Index declined 0.3 percent. The gauge surged 3.1 percent yesterday, the most since May, after the International Council of Shopping Centers trade group said U.S. retail sales probably expanded at an average monthly rate of 4 percent in the first five months of the retail fiscal year that began Jan. 31, the biggest gain since 2006.

Separately, the IMF raised its forecast for global growth this year, reflecting a stronger-than-expected first half, while warning that financial-market turmoil has increased the risks to the recovery. The world economy will expand 4.6 percent in 2010, the biggest gain since 2007, compared with an April projection of 4.2 percent, the Washington-based fund said in revisions today to its World Economic Outlook.

Japanese Exporters Advance

Growth next year is projected to be 4.3 percent, unchanged from the April forecast, the fund said.

Honda climbed 3.7 percent to 2,616 yen and Canon advanced 3.3 percent to 3,445 yen. Toyota Motor Corp., which counts North America as its biggest market outside Japan, gained 2.6 percent to 3,130 yen, while Sony Corp., which receives more than a fifth of its sales from the U.S., increased 4.4 percent to 2,423 yen. Nintendo Co., the maker of the Wii game machine that counts America and Europe as its biggest markets, rose 0.1 percent to 26,520 yen in Osaka.

“The focus now is on how the U.S. economy is doing,” said Mitsushige Akino, who oversees $450 million at Tokyo-based Ichiyoshi Investment Management Co. “The general consensus was that the economy was going to deteriorate, and the good retail sales put a brake on that view.”

BHP Billiton, Australia’s biggest oil producer, climbed 2 percent to A$38.16 after oil climbed for a second day in New York. Also in Sydney, Woodside Petroleum Ltd., Australia’s No. 2 oil and gas producer, advanced 1.9 percent to A$42.09. Inpex Corp., Japan’s largest oil explorer, increased 1.5 percent to 476,000 yen.

Oil, Metal Producers

Cnooc Ltd., China’s biggest offshore energy explorer, climbed 1.3 percent in Hong Kong to HK$12.86. Separately, the company said it’s in “final discussions” on cooperating with Tullow Oil Plc to develop three oil blocks in Uganda’s Lake Albert basin.

Rio Tinto Group, the world’s third-biggest mining company, gained 1.8 percent to A$67.05 after copper futures for September climbed 1.5 percent to $3.015 a pound in New York yesterday. Mitsubishi Corp., Japan’s No.1 commodity trading company, added 2.6 percent to 1,951 yen.

Korea Zinc Co., the world’s second-biggest zinc smelter, climbed 6.7 percent to 237,500 won in Seoul. The company was raised to “buy” from “marketperform” at Daishin Securities Co., which cited the company’s rising sales ratio of precious metals, in a report today.

NEC Supercomputers

Newcrest Mining Ltd., Australia’s biggest gold producer, advanced 2.1 percent to A$34.18 after gold climbed for a second day on speculation its decline to the lowest level in almost six weeks is prompting some investors to increase holdings. Real Gold Mining Ltd., a Chinese producer of the metal, advanced 4.8 percent to HK$11 in Hong Kong.

In Tokyo, NEC, Japan’s largest personal computer maker, jumped 2.2 percent to 237 yen. The company plans to have a 5 percent share of the supercomputer market it forecasts will reach $14.6 billion by 2014, Fumihiko Hisamitsu, general manager of NEC’s high-performance computing division, said in a July 5 interview.

HSBC increased 2.5 percent to HK$73 in Hong Kong. Li & Fung Ltd., the world’s biggest supplier for retailers that gets more than a quarter of its revenue from Europe, advanced 1.9 percent to HK$35.20.

People with knowledge of the European debt crisis said bank stress tests may assume a 17 percent loss on Greek bonds, half of the worst-case scenario estimated by JPMorgan Chase & Co.

Stress Tests

EU regulators are relying on the stress tests to restore public confidence in banks amid concern that some lenders don’t have enough capital to withstand a default by a European country. A stress test of U.S. banks last May spurred a rally that boosted the Standard & Poor’s Financials Index 36 percent in the following seven months.

Australian retailers rose after Australian jobs growth capped the best quarter in almost four years in June. Harvey Norman Holdings Ltd., Australia’s biggest furniture and electronics retailer, climbed 5.8 percent to A$3.65. JB Hi-Fi Ltd., the nation’s No. 2 electrical chain, advanced 4.3 percent to A$19.30. Australian banks also rose.

Among stocks that fell today, Semiconductor Manufacturing International Corp., China’s biggest chipmaker, dropped 10 percent to 53 Hong Kong cents, the MSCI Asia Pacific Index’s biggest decline. The company priced a sale of 1.5 billion shares at 52 Hong Kong cents each, according to two people familiar with the offering.

ABC-Mart Inc. sank 6.5 percent to 3,070 yen. The shoe retailer was cut to “neutral” from “buy” by Ichiyoshi Securities Co. ABC-Mart yesterday said first-quarter net income rose to 3.71 billion yen ($42 million) from 3.56 billion yen a year earlier.

To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

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