Asian Stocks Advance on Rising Japan Machinery Orders
Asian stocks rose as Japan’s machinery orders increased more than economists expected and South Korea’s unemployment fell, adding to evidence the region’s economies are withstanding Europe’s debt crisis.
Hitachi Ltd., which gets about a third of sales from industrial machinery, climbed 2.4 percent in Tokyo. Samsung Electronics Co., the world’s largest maker of mobile phones, rose 1.3 percent in Seoul. Esprit Holdings Ltd. (330) tumbled 21 percent in Hong Kong before trading of its shares was suspended after the clothier’s chief executive officer resigned.
The MSCI Asia Pacific Index (MXAP) gained 0.4 percent to 113.31 as of 7:48 p.m. in Tokyo, erasing losses of as much as 0.2 percent. About three shares rose for every two that fell in the measure. Trading volumes in Australia, Hong Kong and Japan were at least 12 percent lower than the 30-day average ahead of Greek polls June 17 that may determine the nation’s future in the euro.
“Valuations are cheap in Asia and economies are still fairly resilient,” said Pauline Dan, Hong Kong-based chief investment officer at Samsung Asset Management Co., which manages $100 billion. “There are still a lot of uncertainties. If Greece elections lead to a euro exit, it will be chaotic.”
The regional gauge dropped 12 percent from this year’s peak on Feb. 29 through yesterday amid concern growth in the U.S. and China is slowing and as Europe’s debt crisis intensified.
Japan’s Nikkei 225 Stock Average (NKY) added 0.6 percent as machinery orders increased more than economists expected in April. Hitachi climbed 2.4 percent to 476 yen. Fanuc Corp., a maker of industrial robots, added 0.4 percent to 13,580 yen.
South Korea’s Kospi Index added 0.3 percent as the nation’s unemployment rate fell to a four-month low in May. Samsung Electronics added 1.3 percent to 1.271 million won.
China’s Shanghai Composite Index (SHCOMP) advanced 1.3 percent amid speculation that government will ease monetary policy and increase infrastructure spending to stem a slowdown in the domestic economy. Separate reports released over the weekend showed the nation’s exports and imports increasing more than expectations, while factory output and retail sales trailed estimates. Hong Kong’s Hang Seng Index rose 0.8 percent.
Solar-panel makers rallied after First Solar Inc., the world’s largest thin-film panel maker, said it will delay the close of a German plant until the end of the year to meet the unexpected strong demand in Europe.
GCL-Poly Energy Holdings Ltd. (3800), China’s largest maker of silicon for solar panels, jumped 5.2 percent to HK$1.82 in Hong Kong. Sino-American Silicon Products Inc., a Taiwanese supplier of the raw material, advanced 3.5 percent to HK$50.30.
Australia’s S&P/ASX 200 Index slipped 0.2 percent as a survey showed the nation’s consumer confidence stagnated to near the lowest level this year.
Futures on the Standard & Poor’s 500 Index lost 0.3 percent today. The gauge advanced 1.2 percent yesterday in New York as Federal Reserve Bank of Chicago President Charles Evans said he would support measures to generate faster job growth and after the European Central Bank endorsed a plan to guarantee bank deposits.
Companies that do business in Europe declined as Italy prepared to sell 6.5 billion euros ($8.1 billion) of bills today and offer more debt tomorrow. The yield on the nation’s benchmark 10-year government bond rose to as high as 6.3 percent yesterday, a level last seen on Jan. 25.
Hutchison Whampoa Ltd., which operates ports in Spain and Germany, slipped 0.9 percent to HK$64.25 in Hong Kong. Canon Inc., a camera maker that gets about 31 percent of sales from Europe, lost 1.1 percent to 3,215 yen in Tokyo.
Esprit, which counts Europe as its largest market, tumbled 22 percent to HK$10.54, the most since October 1997, before trading of the stock was halted in Hong Kong. Chief Executive Officer Ronald Van der Vis became the second top official to quit in six months.
“The unexpected resignation is a serious blow to the company’s transformation plan and will cast doubt on the execution,” said Andrew Sullivan, principal trader at Piper Jaffray Asia Securities Ltd. in Hong Kong. “Investors may fear that his stepping down will bring the transformation efforts back to square one.”
The Asian benchmark dropped 0.9 percent this year through yesterday, compared with a 5.3 percent advance by the S&P 500 and a 0.5 percent drop by the Stoxx Europe 600 Index. Shares on the Asian benchmark are valued at 1.2 times book value, compared with 2.1 times for the S&P 500 and 1.3 times for the Stoxx 600, according to data compiled by Bloomberg. A number below one means companies can be bought for less than value of their assets.
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