Asian stocks rose, driving the MSCI Asia Pacific Index higher for the third straight day, as better- than-estimated U.S. home sales and earnings reports boosted investor confidence.
James Hardie Industries SE, the biggest seller of home siding in the U.S., jumped 2.9 percent in Sydney. HSBC Holdings Plc, Europe’s largest bank, gained 1.4 percent after Swiss lender UBS reported a third consecutive quarterly profit. Sumitomo Mitsui Financial Group Inc. rose 2.8 percent in Tokyo on higher earnings at its investment-banking unit. Singapore Airlines Ltd. rose 1.8 percent on better-than-estimated profit.
“Strong earnings and better economic news have reduced fears of a double-dip recession,” said Nader Naeimi, a Sydney- based strategist at AMP Capital Investors Ltd., which manages about $90 billion. “After a spate of worse than expected data out of the U.S., the market is prepared to pay more attention to good news.”
The MSCI Asia Pacific Index gained 0.3 percent to 118.38 as of 7:18 p.m. in Tokyo. The measure’s three-day winning streak is the longest since an eight-day advance to June 21. The gauge has slumped 8.3 percent from its high this year on April 15 on concern Europe’s debt crisis and Chinese steps to curb property prices will slow global economic growth.
Hong Kong’s Hang Seng Index climbed 0.6 percent, while Australia’s S&P/ASX 200 Index rose 0.3 percent. Japan’s Topix index gained less than 0.1 percent. China’s Shanghai Composite Index lost 0.5 percent, led by banks on concern over rising credit risks.
Futures on the U.S. Standard & Poor’s 500 increased 0.5 percent. The gauge gained 1.1 percent yesterday after the report on June home sales and after FedEx Corp., the second-largest U.S. package-shipping company, boosted its profit forecast.
James Hardie surged 2.9 percent to A$6.73. Nissan Motor Co., which gets a third of its revenue from North America, increased 0.8 percent to 634 yen. Hyundai Motor Co., which derives 14 percent of its sales in North America, advanced 2.5 percent to 143,500 won in Seoul.
New U.S. home purchases increased 24 percent from May to an annual pace of 330,000, the Commerce Department said yesterday. The median forecast of economists in a Bloomberg News survey was for an advance of 3.3 percent to 310,000. A government report later today will show U.S. durable goods orders gained 1 percent from the previous month, after falling 0.6 percent in May, according to a Bloomberg News survey.
The home-sales data helped ease concerns the world’s biggest economy is stalling. Sales at U.S. retailers declined in June for a second month, the Commerce Department reported on July 14. Home-builder confidence dropped this month to the lowest level since April 2009, National Association of Home Builders/Wells Fargo data on July 19 showed.
Speculation economic growth may falter dragged down the MSCI Asia Pacific Index by as much as 9.6 percent this year, cutting the average price of stocks in the gauge to the lowest level since December 2008. The index’s companies now trade at 14.2 times estimated profit, compared with 13.5 times for the S&P 500 Index and 11.9 times for the Stoxx Europe 600 Index.
In Hong Kong, HSBC climbed 1.7 percent to HK$78.85, while Standard Chartered Plc, a British bank that makes most of its profit in Asia, jumped 3 percent to HK$224.60.
Both stocks rallied during afternoon trading in Hong Kong after UBS reported net income of 2.01 billion Swiss francs ($1.91 billion). That beat the 1.12 billion-franc median estimate of 11 analysts surveyed by Bloomberg News.
Sumitomo Mitsui, Japan’s second-largest publicly traded bank, gained 2.8 percent to 2,587 yen. Nikko Cordial Securities Inc., the investment-banking unit of Sumitomo Mitsui, said first-quarter profit rose 24 percent on higher commissions and trading activity.
Bank stocks also rose after the Basel Committee on Banking Supervision, which represents central banks and regulators in 27 nations and sets capital standards for banks worldwide, softened capital rules proposed for lenders. The committee was asked by Group of 20 leaders to draft rules in the aftermath of the credit crisis.
Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, rose 2.4 percent to 418 yen and Westpac Banking Corp. climbed 2.4 percent to A$23.70 in Sydney.
“Relaxation of the regulations will remove remaining concerns about further equity capital increases,” Shinichi Ina, a Tokyo-based analyst at Credit Suisse Group AG, wrote in a report dated today.
Singapore Air, the world’s second-largest carrier by market value, gained 1.8 percent to S$15.02. The carrier’s first- quarter net income of S$252.5 million ($186 million), beating the S$162.4 million average analyst estimate compiled by Bloomberg.
Seiko Epson, Kao
In Tokyo, Seiko Epson Corp. rose 4.4 percent to 1,156 yen after the Nikkei newspaper said the printer maker may have posted its first operating profit in two years in the first quarter on rising demand for printers and electronic parts.
Kao Corp. increased 1.1 percent to 2,111 yen after the toiletry maker said net income for the quarter ended June 30 rose 5.7 percent, boosted by an increase in sales.
“Corporate earnings are good,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “Companies which reported strong earnings should be targets” for investors to buy.
Chinese banks declined on speculation lenders may curb lending to local governments. Banks may struggle to recoup about 23 percent of the 7.7 trillion yuan ($1.1 trillion) they’ve lent to finance local infrastructure projects, according to a person with knowledge of data collected by the China Banking Regulatory Commission. China this year restricted borrowing on concern money isn’t being used for viable projects.
Industrial & Commercial Bank of China Ltd., the nation’s No.1 lender by market value, lost 1.2 percent to 4.28 yuan in Shanghai. Bank of China Ltd. dropped 0.3 percent to 3.55 yuan.
China State Construction International Holdings Ltd. surged 5.7 percent to HK$3.32 in Hong Kong. Citigroup Inc. rated the stock “buy” in new coverage.