Asian Stocks Advance, Reversing Losses, as Earnings Temper Growth Concerns
Asian stocks rose for a second day, paring the regional benchmark gauge’s fourth weekly decline, as corporate profits at companies including Genting Bhd. overshadowed data showing U.S. economic growth is faltering.
Lenovo Group Ltd. (992), China’s biggest computer maker, climbed 5.3 percent in Hong Kong after posting fourth-quarter profit that tripled. Fisher & Paykel Appliances Holdings Ltd. (FPA), New Zealand’s largest refrigerator maker, jumped 9.9 percent after posting earnings that beat analyst estimates. Li & Fung Ltd. (494), the biggest supplier of clothes and toys to Wal-Mart Stores Inc., fell 2.6 percent in Hong Kong after U.S. data showed the economy grew at a slower rate than forecast.
The MSCI Asia Pacific Index gained 0.7 percent to 134.35 as of 5:34 p.m. in Tokyo, erasing earlier losses of as much as 0.2 percent and paring the measure’s fourth weekly decline to 0.2 percent. About five stocks rose for every four that fell on the gauge, which last week slid as Greece’s debt crisis intensified, Japan’s economy contracted, and disappointing U.S. economic data fueled concern about the global recovery.
“Following the recent market decline, stock valuations are offering investors some scope for upside,” said Ng Soo Nam, the Singapore-based chief investment officer at Nikko Asset Management Co., which oversees about $126 billion. “While the U.S. economy is showing a painfully slow pace of recovery, I’m comfortable as long as the momentum doesn’t reverse. Most corporate earnings have also met expectations.”
South Korea’s Kospi Index gained 0.4 percent and Australia’s S&P/ASX 200 Index added 0.5 percent. Hong Kong’s Hang Seng Index advanced 1 percent. China’s Shanghai Composite Index retreated 1 percent. Japan’s Nikkei 225 Stock Average dropped 0.4 percent.
Futures on the Standard & Poor’s 500 Index added 0.3 percent today. In New York, the index advanced 0.4 percent to 1,329.70 yesterday as higher-than-estimated corporate profits at companies including Tiffany & Co. overshadowed disappointing U.S. economic data.
The MSCI Asia Pacific Index lost 3.2 percent this year through yesterday, compared with gains of 5.4 percent by the S&P 500 and 0.5 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 13.4 times estimated earnings on average, compared with 13.4 times for the S&P 500 and 11 times for the Stoxx 600.
About 53 percent of the 633 companies on the MSCI Asian gauge that reported earnings since April 11 posted an increase earnings, while 40 percent beat analyst estimates.
‘Lack of Conviction’
“There’s a lot of cash sitting on the sidelines and some of that is being deployed on a case-by-case basis,” said Tim Schroeders, a Melbourne-based fund manager at Pengana Capital Ltd., who oversees about $1 billion. “Investors are putting toe in the water, rather than diving in at the deep end. Overall, there remains a lack of conviction in markets despite a more positive tone early today.”
Lenovo climbed 5.3 percent to HK$4.56 in Hong Kong. The company said fourth-quarter net income tripled to $42 million, exceeding the $38.4 million average of six analyst estimates compiled by Bloomberg.
Gome Electrical Appliances Holding Ltd., China’s second- largest electronics retailer, jumped 8.2 percent to HK$3.04 after saying first-quarter profit surged 66 percent from a year earlier to 552 million yuan ($85 million).
Fisher & Paykel surged 9.9 percent to 61 New Zealand cents in Wellington, the best performance since May 2009. The company said full-year profit excluding one-time items rose 67 percent from a year earlier to NZ$30 million ($24 million), beating the NZ$24.7 million average of six analyst estimates compiled by Bloomberg.
Genting Bhd. (GENT), Asia’s third-biggest casino operator by market value, rose 0.9 percent to 11.20 ringgit in Kuala Lumpur trading. The company reported first-quarter net income jumped 255 percent from a year ago to 824.2 million ringgit ($273 million), bolstered by higher contributions at its Singapore gambling resort and Malaysian plantations business.
Hitachi Construction Machinery Co., Japan’s second-largest maker of construction equipment, gained 1.4 percent to 1,688 yen in Tokyo. The company forecast net income will more than double to 23 billion yen ($284 million) from 11.1 billion yen a year earlier on growing sales.
Senshu Electric Co., a Japanese distributor of cable and wire products, jumped 8.5 percent to 1,099 yen. The company boosted its full-year net income forecast 34 percent to 1.68 billion yen, due to higher overseas sales and increasing restoration demand after Japan was struck by the biggest ever earthquake in March.
Exporters declined after reports showed U.S. economic growth slowed to a 1.8 percent annual rate in the first quarter, reflecting a smaller gain in consumer spending than previously calculated. That compared with a 3.1 percent expansion in the prior quarter, Commerce Department figures showed. The median forecast of economists surveyed by Bloomberg News was for 2.2 percent growth.
Unemployment claims increased by 10,000 to 424,000 last week, Labor Department figures showed. The median estimate of economists was for a drop to 404,000.
Li & Fung, which gets 65 percent of sales from the U.S., fell 2.6 percent to HK$16.20 in Hong Kong. HTC Corp. (2498), the Taiwanese smartphone maker that counts America as its biggest market, declined 1.3 percent to NT$1,180. Brambles Ltd. (BXB), the world’s largest supplier of wooden pallets, dropped 0.8 percent to A$7.25 in Sydney.
Sony Corp. (6758), the maker of PlayStation gaming consoles and Bravia televisions, decreased 3.2 percent to 2,167 yen in Tokyo, its lowest close since July 2009. The company said net income will probably be 80 billion yen in the year to March 2012. That missed the 115.9 billion yen average of 12 analyst estimates compiled by Bloomberg.
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