Asian Equities Advance After U.S., German Economic Reports Beat Estimates
Jan. 18 (Bloomberg) -- David Cui, China strategist at Bank of America Merrill Lynch in Shanghai, talks about the outlook for China's economic growth, stocks and his investment strategy. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Jan. 17 (Bloomberg) -- Michael O'Sullivan, head of U.K. research and global asset allocation at Credit Suisse Group AG's private banking unit, talks about the outlook for equity markets. He speaks with Linzie Janis and Owen Thomas on Bloomberg Television's "Countdown." (Source: Bloomberg)
Asian stocks rose, with a regional benchmark index set for the highest close in six weeks, as economic reports in the U.S. and Germany beat estimates and oil prices gained.
Fanuc Corp. (6954), a Japanese maker of factory automation systems that gets 75 percent of its sales abroad, rose 4.2 percent. Inpex Corp. (1605), Japan’s biggest energy explorer, advanced 1.8 percent. BHP Billiton Ltd. (BHP), Australia’s No. 1 oil and gas producer, gained 0.8 percent after reporting plans to boost exploration spending. Tokyo Electric Power Co. surged 7.8 percent after the utility said it will raise power prices.
The MSCI Asia Pacific Index gained 0.3 percent to 118.19 as of 7 p.m. in Tokyo after swinging between gains and losses at least seven times. Six of the 10 industry groups on the index advanced. The measure added 1.9 percent yesterday, the most since Dec. 21.
“Parts of the U.S. economy are insulated from what’s going on in Europe, which is good to say,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Equities remain attractive, but to expect large double-digit returns over the short period of time is unrealistic.”
Japan’s Nikkei 225 Stock Average rose 1 percent. Hong Kong’s Hang Seng Index climbed 0.3 percent. Australia’s S&P/ASX 200 advanced less than 0.1 percent, and South Korea’s Kospi Index was little changed. The MSCI Asia Pacific excluding Japan Index rose 0.1 percent.
U.S., German Data
Futures on the Standard & Poor’s 500 Index were little changed today after the gauge rose 0.4 percent yesterday. A report showed manufacturing in the New York region expanded in January at the fastest pace in nine months. German investor confidence rose the most on record in January. Spanish borrowing costs fell at a debt auction as investors ignored S&P credit- rating downgrades.
Fanuc advanced 4.2 percent to 12,470 yen. James Hardie Industries SE (JHX), an Australian building-materials supplier that gets almost 70 percent of sales from the U.S., added 0.4 percent to A$7.27. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., rose 1.9 percent to HK$16.56 in Hong Kong.
Inpex advanced 1.8 percent to 517,000 yen as crude for February delivery rose as much as 72 cents to $101.43 a barrel in electronic trading on the New York Mercantile Exchange. Smaller Japan Petroleum Exploration Co. climbed 3.3 percent to 3,260 yen.
BHP Billiton added 0.8 percent to A$37 after the world’s biggest mining company said it expects to more than double full- year spending on petroleum exploration to $1.4 billion after buying U.S. shale gas assets last year.
Power Prices
Tokyo Electric Power said yesterday it will raise electricity rates for companies and other large users, potentially increasing annual revenue by 400 billion yen ($5.2 billion) to cover higher fuel costs after the Fukushima nuclear crisis caused by last year’s earthquake and tsunami. The utility, known as Tepco, rose 7.8 percent to 221 yen, the biggest increase in the Asia-Pacific index.
Gains in stocks were limited after Fitch Ratings Managing Director Edward Parker said yesterday that Greece is insolvent and probably will fail to meet a bond payment in March.
“The market has already priced in a Greek default, but the concern is that there will be a domino effect across the whole region,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at Tokyo-based T&D Asset Management Co.
Esprit, Nintendo
Esprit Holdings Ltd. (330), the Hong Kong-based clothier that counts Europe as its biggest market, dropped 2.6 percent to HK$11.38.
Nintendo Co. (7974), a Japanese maker of game consoles that gets 34 percent of its sale in Europe, slid 3 percent to 10,100 yen.
The MSCI Asia Pacific Index advanced 3.5 percent this year through yesterday, compared with a 2.9 percent gain by the S&P 500 and a 3.6 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.4 times estimated earnings on average, compared with 12.3 times for the S&P 500 and 10.2 times for the Stoxx 600.
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net
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