Asian Stocks, Won Climb on Global Recovery; Commodities Rally
Asian stocks rose for a third day and South Korea’s won gained the most in three weeks amid signs the global economic recovery is accelerating. Silver led a gain in metal prices.
The MSCI Asia Pacific Index climbed 0.6 percent, with about three stocks advancing for every two that fell, while the Stoxx Europe 600 Index was little changed as of 4:15 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index gained 0.1 percent. The yen weakened against emerging-market currencies as signs the global recovery is picking up damped demand for Japan’s currency as a refuge.
Government data showed South Korea’s unemployment rate fell to a three-month low of 3.6 percent in April, while investment and retail sales sustained growth in China. Europe’s economy expanded at a 2.2 percent annual rate in the first quarter after a 2 percent pace in the previous quarter, according to a Bloomberg News survey before a May 13 report. Inflation in Germany, Europe’s largest economy, accelerated more than initially estimated in April.
“The global economy is on track to recovery,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The yen’s appreciation, which was weighing on exporters and related stocks, is taking a pause. That will likely boost the stock market.”
Japan’s Nikkei 225 (NKY) Stock Average rose 0.5 percent. South Korea’s Kospi Index gained 1.3 percent, while Australia’s S&P/ASX 200 Index advanced 1.2 percent. BHP Billiton Ltd. (BHP), the world’s biggest mining company, increased 1.7 percent in Sydney, while South Korea’s S-Oil Corp. (010950) surged 2.5 percent. Honda Motor Co. advanced 2.1 percent in Tokyo after the yen weakened, boosting the earnings outlook for Japanese exporters.
The yen touched 81.09 against the dollar, the weakest since May 4, before trading at 80.75 in Tokyo from 80.88 in New York yesterday. It was at 116.21 per euro from 116.54 yesterday, when it fell 1 percent. The euro fetched $1.4390 from $1.4409. The won rose 0.8 percent to 1,075.20 per dollar and 0.8 percent to 13.316 against the yen.
“The data are showing the global economy is looking very strong,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s largest interdealer broker. “Against this backdrop, safe-haven currencies such as the yen and the Swiss franc are likely to be sold.”
Of the 463 companies in the MSCI Asia Pacific Index that have reported earnings since April 1, more than half said profit grew. About the same number of companies in the gauge have exceeded estimates as have failed to meet them.
In Tokyo, Orix Corp., a financial-services company, climbed 4 percent after full-year net income surged 78 percent from a year earlier. Sumitomo Rubber Industries Ltd., Japan’s second- biggest tiremaker, gained 4.9 percent after raising its net income forecast for the year ending Dec. 31 by 28 percent.
“Sentiment is now shifting because of the strengthening earnings environment and the positive prospects for corporate activity,” said Nader Naeimi, a Sydney-based strategist for AMP Capital Investors Ltd., which has almost $100 billion under management.
China Car Sales
Shares of Chinese automakers and developers dropped after a report showed consumer prices in China rose more than the government’s full-year target, raising concern the nation will take more steps to curb inflation. China’s consumer prices rose 5.3 percent in April from a year earlier, exceeding economists’ median estimate of 5.2 percent.
The government is seeking to control consumer prices that rose to the highest in three years in March, without stifling growth that’s powering the world’s second-biggest economy. The nation’s passenger-car sales slowed in April from the previous month as the government raised fuel prices and Japan’s record earthquake slowed deliveries.
BYD Co., the Chinese carmaker backed by Warren Buffett, retreated 2.3 percent in Hong Kong, while Geely Automobile Holdings Ltd. (175), the unit the Chinese automaker that owns Volvo, sank 1.3 percent. China Resources Land Ltd. (1109), a state-owned developer, lost 0.7 percent, while Hang Lung Properties Ltd., which gets about 16 percent of sales in China, fell 1.3 percent. The Shanghai Composite Index fell 0.2 percent. The Chinese yuan was little changed at 6.4925 against the dollar.
China’s fixed-asset investment grew 25.4 percent in the first four months of 2011 from a year earlier, today’s report showed. Retail sales rose 17.1 percent in April and industrial production gained 13.4 percent.
“The higher-than-expected inflation fueled investors’ concern over inflation and more tightening measures,” said Li Jun, a strategist at Central China Securities Co. in Shanghai. “The economy has shown signs of a slowdown and inflationary pressure isn’t easing at all. That makes it a bad scenario for the market.”
Silver futures advanced 2 percent to $39.295 an ounce, bringing their increase this week to 11 percent after a 27 percent plunge last week, the worst since at least 1975. Copper for three-month delivery lost 0.5 percent, erasing earlier gains. Oil futures in New York gained 0.2 percent to $104.08 a barrel.
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