Asian Stocks Gain on U.S. Retail Sales, Fed U.S. Outlook

Asian stocks rose for a second day after U.S. retail sales jumped and the Federal Reserve raised its assessment of the world’s biggest economy. Shares pared gains after Chinese Premier Wen Jiabao said home prices are still too high.

Toyota Motor Corp. (7203) rose 2.1 percent in Tokyo. HSBC Holdings Plc and other lenders rose after the Fed said most of the largest U.S. bank have enough capital to weather another recession. Samsung Electronics Co. climbed 2.4 percent in Seoul after saying it will supply screens for Apple Inc.’s new iPad. Evergrande Real Estate Group Ltd., a mainland developer, fell 1.7 percent in Hong Kong.

The MSCI Asia Pacific Index gained 0.4 percent to 127.41 as of 9:27 p.m. in Tokyo, paring an earlier advance of as much as 1.2 percent. About three stocks rose for each that fell as the gauge headed for its highest close since March 2. The index gained 11 percent this year through yesterday amid signs the U.S. economy is recovering and as China eased lending curbs.

“Asia is obviously benefiting from strengthening in the U.S.,” said Shane Oliver, Sydney-based head of strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “It’s also being helped by interest rate cuts and monetary easing across the region from India to China.”

Japan’s Nikkei 225 Stock Average (NKY) advanced 1.5 percent. South Korea’s Kospi Index climbed 1 percent and Australia’s S&P/ASX 200 Index increased 0.9 percent.

Stocks in the MSCI Asia Pacific Index were valued at 14.9 times estimated earnings on average at yesterday’s close, compared with 13.4 times for the S&P 500 and 11.2 times for the Stoxx Europe 600 Index.

‘Chaos in Housing’

Hong Kong’s Hang Seng Index slid 0.2 percent, reversing gains of as much as 1.4 percent, after Wen said loosening property controls risks “chaos in China’s housing sector.” The Shanghai Composite Index (SHCOMP), which tracks the bigger of China’s stock exchanges, dropped 2.6 percent.

Futures on the Standard & Poor’s 500 Index (SPXL1) were little changed today. The gauge advanced 1.8 percent in New York yesterday after a report showed U.S. retail sales increased the most in five months and the Fed lifted its assessment of the economy, citing an improving labor market.

Toyota gained 2.1 percent to 3,485 yen in Tokyo. James Hardie Industries SE (JHX), an Australian supplier of building materials that gets more than half of its sales from the U.S., climbed 2.4 percent to A$7.80 in Sydney.

Financial shares rose after the Fed yesterday said 15 of the 19 largest U.S. lenders could weather another recession.

Banks Climb

HSBC Holdings, Europe’s biggest bank by market value, rose 2.3 percent to HK$69.30 in Hong Kong, while Mitsubishi UFJ Financial Group Inc. (8306), Japan’s top bank by market value, increased 2.6 percent to 433 yen.

Samsung Electronics increased 2.4 percent to 1.25 million won. The company will supply Apple with iPad screens after LG Display Co. and Sharp Corp. didn’t meet the U.S. tech company’s quality requirements, according to an analyst at research firm iSuppli.

Mining shares advanced after the London Metal Exchange Index of prices for six industrial metals rose 1.4 percent yesterday. BHP Billiton Ltd. rose 1.3 percent to A$35.61, while Rio Tinto Group gained 1.5 percent to A$65.30 in Sydney.

Far From Reasonable

Mainland developers dropped after China’s Wen said home prices are still far from reasonable levels after two years of property controls, The government wants to ensure long-term, stable growth in the real estate market, he said at the end of the annual National People’s Congress.

Evergrande Real Estate, China’s second-largest homebuilder by sales, dropped 1.7 percent to HK$4.57. Soho China Ltd., a Beijing and Shanghai developer, fell 2.9 percent to HK$5.29.

Wen’s comments “prompted a sell-off in developers as obviously there will not be an easing of current restrictions,” said Andrew Sullivan, principal sales trader at Piper Jaffray Asia Securities Ltd. in Hong Kong. “Developers will face tough times for the foreseeable future.’

Among other share that declined, United Co. Rusal sank 4.1 percent to HK$5.87 in Hong Kong after Victor Vekselberg quit as chairman, citing disagreements about dividends and asset sales with Oleg Deripaska, the chief executive officer and controlling shareholder. The debt-laden aluminum producer was suspended from trading at the Hong Kong bourse yesterday at the company’s request.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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