Stocks Rise in Europe, Asia; U.S. Futures Little Changed, Won Strengthens
Sept. 2 (Bloomberg) -- John Vail, chief global strategist at Nikko Asset Management, talks about equity investment opportunities in Japan and the impact of the strengthening yen on strategy. He speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Asian and European stocks rose as a surprisingly positive increase in pending U.S. home sales lifted confidence in the world’s largest economy. Japanese bonds dropped while the South Korean won strengthened.
The MSCI Asia Pacific Index climbed 0.5 percent to 119.86 as of 5:22 p.m. in Tokyo, extending the benchmark index’s biggest weekly gain in a month. Benchmark 10-year yields for Japanese bonds climbed to a seven-week high. The Stoxx Europe 600 Index added 0.3 percent to 258.97. Futures on the Standard & Poor’s 500 Index were little changed.
The advance in stocks this week added $1.2 trillion to the global equities market as China’s manufacturing increased and India’s economy expanded at the fastest pace in 2 ½ years. Pending sales of existing U.S. homes unexpectedly climbed 5.2 percent in July from a record low, and initial jobless claims decreased, signaling the resilience of the pickup.
“Investors have responded to the good news this week and the optimism that the U.S. economy is on a recovery path,” said Rico Gomez, who helps manage about $1 billion at Manila-based Rizal Commercial Banking Corp. “Global demand will be good for corporate earnings and economic growth.”
Japan’s Nikkei 225 Stock Average gained 0.6 percent and Taiwan’s Taiex Index climbed 1.4 percent.
Sony, Toyota
Sony Corp., the electronics maker that gets 22 percent of sales from the U.S., jumped 2.4 percent. Toyota Motor Corp., an automaker that earns 70 percent of its revenue abroad, increased 2.1 percent. James Hardie Industries SE, the biggest seller of home siding in the U.S., climbed 2.1 percent.
“Investors are kind of relieved because a downward spiral in the global economy had a pause this week,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “But investors won’t jump into buying shares just because of that, since there is still a strong sense of uncertainty.”
The yield on the 1 percent Japanese government bond due in September 2020 rose three basis points to 1.135 percent as at Japan Bond Trading Co., the nation’s largest interdealer debt broker. That’s the highest for a 10-year yield since July 14. Capital spending in Japan excluding software fell 1.5 percent in the three months ended June 30, the Finance Ministry said before markets opened. Economists had estimated a 5.9 percent slide.
Won Strengthens
South Korea’s won gained 0.4 percent to 1,175.88 per dollar. The Bank of Korea will raise its benchmark interest rate by 25 basis points to 2.5 percent at its Sept. 9 meeting, according to six out of eight economists in a Bloomberg News survey. Two forecast no change. The Philippine peso climbed 0.4 percent to 46.23 per dollar.
U.S. retailers also reported August sales that beat analyst estimates as back-to-school discounts and tax holidays lured consumers to malls.
Markets were muted ahead of data that may show U.S. NZSE50FG Index payrolls fell by 105,000 in August, after dropping by 131,000 the previous month, according to a Bloomberg survey before the Labor Department report today. The jobless rates climbed to 9.6 percent from 9.5 percent, a separate survey showed.
To contact the reporters on this story: Linus Chua at lchua@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net
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