Asian stocks (MXAP) pared gains as Italy and France prepared to sell debt and Moody’s Investors Service reiterated it plans to review the credit ratings of European nations even after an agreement to tighten fiscal controls in the region and boost a bailout fund.
The Hang Seng Index fell 0.1 percent, reversing an advance of as much as 1.8 percent. Esprit Holdings Ltd. (330), the Hong Kong- based clothier that counts Europe as its biggest market, slipped 1.7 percent, reversing an advance of as much as 2.2 percent. James Hardie Industries SE (JHX), the building materials suppliers that counts the U.S. as its biggest market, gained 2.2 percent.
“The European situation will continue to bother us into next year as policy initiatives seem insufficient,” said Mark Matthews, Singapore-based head of research for Asia at Bank Julius Baer & Co., which has about $180 billion globally. “U.S. economic data is improving quite nicely and that’s one of the few bright spots in the world.”
The MSCI Asia Pacific Index gained 0.5 percent to 115.66 as of 7:28 p.m. in Tokyo, paring a gain of as much as 1.4 percent. About two shares rose for each that fell in the measure. The gauge dropped 2.2 percent last week after Standard & Poor’s said it may cut credit ratings for Germany, France and 13 other euro- area countries amid a deepening debt crisis.
Japan’s Nikkei 225 Stock Average (NKY) increased 1.4 percent led by Olympus Corp., the endoscope maker at the center of an accounting scandal. The company’s shares jumped 7.8 percent after saying it will meet a Dec. 14 deadline to submit its accounts to avoid delisting.
South Korea’s Kospi Index gained 1.3 percent. Australia’s S&P/ASX 200 index added 1.2 percent. China’s Shanghai Composite Index declined 1 percent.
Futures on the Standard & Poor’s 500 Index (SPXL1) fell 1 percent today. The index rose 1.7 percent in New York on Dec. 9 after European leaders in Brussels tightened anti-deficit rules and agreed to boost their rescue fund by as much as 200 billion euros ($267 billion) by funneling money to the International Monetary Fund.
Europe’s leaders outlined a “fiscal compact” to prevent future debt run-ups and accelerated the start of a planned 500 billion-euro rescue fund.
“Of course people are getting relief from the Europe talks, but people probably don’t think they still have any long- term solution,” said Alex Wong, an asset-management director at Ample Capital Ltd. in Hong Kong. “People are very cautious.”
Esprit fell 1.7 percent to HK$10.58 in Hong Kong, after gaining as much as 2.2 percent. Hutchison Whampoa Ltd. (13), a retailer and port operator that gets more than half of revenue from Europe, dropped 0.5 percent to HK$65.70, erasing an earlier advance of up to 2 percent.
Shares of exporters gained as confidence improved among consumers in the U.S., the world’s biggest economy. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to a six-month high of 67.7 in December from 64.1 in November, beating estimates.
James Hardie advanced 2.2 percent to A$6.89 in Sydney. Canon Inc., the world’s biggest camera maker, rose 1.6 percent to 3,500 yen in Tokyo. Sony Corp. (6758), Japan’s largest exporter of consumer electronics, added 1.3 percent to 1,423 yen.
Samsung Electronics climbed 2.9 percent to 1.084 million won in Seoul. The company said yesterday its mobile-phone handset sales this year reached a record of 300 million units. Technology companies had the biggest advance among the 10 industries on the MSCI gauge.
Olympus Corp. (7733), the scandal-hit maker of cameras and endoscopes, jumped 7.8 percent to 1,300 yen in Tokyo, the most in the MSCI Asia Pacific Index. The company said it plans to release earnings by the Dec. 14 deadline, allowing it to avoid automatic delisting.
The MSCI Asia Pacific Index declined 16 percent this year through last week, compared with a 0.2 percent drop by the S&P 500 and a 13 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.7 times estimated earnings on average, compared with 12.7 times for the S&P 500 and 10.6 times for the Stoxx 600.
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