Asian Stocks Advance Most Since March as Valuations Decline to 2008 Levels
Asian stocks gained, with the benchmark regional index set for its biggest rise in almost six months, after a three-day drop left valuations near a three-year low and as a weaker yen boosted the outlook for Japanese exporters.
Toyota Motor Corp. (7203), the world’s biggest carmaker, advanced 2.9 percent in Tokyo. Samsung Electronics Co., a South Korean exporter of consumer electronics that counts Europe as its third-largest market for sales, increased 6.3 percent. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, advanced 3.7 percent after oil and copper prices rose. Hynix Semiconductor Inc. jumped 15 percent in Seoul, rebounding after having lost more than half its value since April, on speculation that chip prices will recover.
“Unless we get clear policies, it’s hard to make long- lasting investment decisions,” Belinda Allen, senior analyst of investment markets research at Colonial First State Global Asset Management in Sydney, which oversees about $150 billion, said in an interview with Bloomberg TV. “It’s too soon to say we’re on a firmer footing.”
The MSCI Asia Pacific Index climbed 2.3 percent to 121.76 at 7:28 p.m. in Tokyo, with about seven stocks gaining for each that fell. The measure lost 5.1 percent in the last three days, dragging down its valuations below a level last seen in Oct. 2008. The gauge slumped 8.6 percent last month, the most since May 2010, amid concern global economic growth is slowing as Europe’s sovereign debt crisis spreads and after Standard & Poor’s cut the U.S. credit rating.
Australia’s GDP Gains
Japan’s Nikkei 225 (NKY) Stock Average rose 2 percent. South Korea’s Kospi Index rallied 3.8 percent. Hong Kong’s Hang Seng Index rose 1.7 percent, while China’s Shanghai Composite index climbed 1.8 percent.
Australia’s S&P/ASX 200 Index jumped 2.7 percent after the Bureau of Statistics said the nation’s gross domestic product expanded 1.2 percent in the second quarter from the previous three months, beating the median of 25 estimates in a Bloomberg News survey calling for 1 percent increase in GDP.
Futures on the Standard & Poor’s 500 Index rose 0.9 percent today. In New York, the index fell 0.7 percent yesterday, paring a loss of as much as 2.9 percent, amid concern Europe’s debt crisis is worsening.
Greece said it will accelerate austerity measures in return for international financing as pressure mounted from European partners before the payment of a sixth tranche of bailout loans. German Finance Minister Wolfgang Schaeuble said yesterday that Greece won’t get its next bailout installment unless it meets goals under the aid package.
Stocks also pared losses in the U.S. earlier in the day after the Institute for Supply Management’s index of non- manufacturing businesses increased to 53.3 in August from 52.7 a month earlier, beating the median 51 projection by economists in a Bloomberg News survey. A reading above 50 signals expansion.
Samsung Electronics, which receives about 40 percent of its sales from America and Europe, advanced 6.3 percent to 773,000 won in Seoul. Taiwan Semiconductor Manufacturing Co., the chipmaker which counts America as its biggest market, climbed 3.8 percent to NT$68.6 in Taipei. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., rose 5.4 percent to HK$14.44 in Hong Kong.
Shares also gained ahead of an address on Sept. 8 by President Barack Obama, where he may announce plans to propose boosting job growth by injecting more than $300 billion into the economy next year mostly through tax cuts, infrastructure spending and direct aid to state and local governments.
“The service industries data gave some positive note for the market,” said Ben Kwong, chief operating officer at KGI Asia Ltd. “Investors are now shifting their focus on the upcoming announcement by Obama on his new economic plan. That’s raising positive expectation in the market, supporting local shares.”
Japanese exporter shares also gained after the nation’s currency weakened against the dollar. The yen traded at 77.27 per dollar today, compared with 76.83 yen at the close of Japanese stock trading yesterday.
The imposition by Switzerland’s central bank of a ceiling on the franc’s exchange rate spurred speculation Japan will follow the European nation in weakening its currency. The Bank of Japan will conclude a two-day policy meeting today. A weaker yen against the dollar boost exporters’ overseas income when repatriated.
Toyota, which counts the U.S. and Canada as its biggest overseas market, advanced 2.9 percent to 2,680 yen, the biggest support to gains by Japan’s Topix index. Honda Motor Co., the automaker which counts North America as its biggest market for sales, climbed 1.6 percent to 2,376 yen. Nintendo Co., which receives more than 80 percent of its sales from outside Japan, increased 3.5 percent to 13,220 yen.
“Stocks should be bought back as the yen’s appreciation is taking a pause,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Price-to-book ratio shows stocks are cheap, and technical indicators are also showing equities are approaching a buy zone.”
The MSCI Asia Pacific Index declined 14 percent this year through yesterday, compared with a 7.4 percent drop by the S&P 500 and a 20 percent decline by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 11.7 times estimated earnings on average, compared with 11.6 times for the S&P 500 and 9.3 times for the Stoxx 600.
Hynix Semiconductor Inc. (000660), the world’s second-largest computer-memory chipmaker, rallied 15 percent, the biggest advance since April 2009. The price of the benchmark DDR3 2- gigabit DRAM has fallen 3 percent this month after falling 14 percent in August, according to data from Taipei-based Dramexchange Technology Inc., operator of Asia’s largest spot market for semiconductors.
“There’s some consensus that the chip market is near its bottom,” Ahn Seong Ho, an analyst at Hanwha Securities Co. who covers technology stocks, said in Seoul today.
Raw material producers posted the second-biggest increase among the 10 industry groups on the MSCI Asia Pacific Index, rising 2. percent. All groups rose on the measure.
BHP, which is also Australia’s No. 1 oil producer, rose 3.7 percent to A$38.23. Rio Tinto Group, the world’s second-largest mining company by sales, rose 3.2 percent to A$70.60. Cnooc Ltd., China’s biggest offshore oil explorer, advanced 2.3 percent to HK$14.20.
Copper in London rose as much as 1.2 percent today for its first gain in five days. Oil advanced from the lowest price in more than a week in New York. Crude for October delivery rose as much as $1.40 to $87.42 a barrel in electronic trading on the New York Mercantile Exchange.
Capitaland Ltd., Southeast Asia’s biggest developer, climbed 7.3 percent to S$2.64 in Singapore, the biggest one-day gain since May 27, 2009. The company said in a Singapore stock exchange statement yesterday it bought back 1.5 million shares at between S$2.42 and S$2.45 apiece.
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