Asian Stocks Advance as U.S. Jobs Report Boosts Optimism
Asian stocks rose, with the regional benchmark index rising to its highest level in a month, after better-than-forecast data for U.S. employment and the services industry eased investor concern that growth is slowing in the world’s largest economy.
Li & Fung Ltd. (494), a maker of toys and clothes that gets 60 percent of its sales in the U.S., climbed 4.1 percent in Hong Kong. Asahi Glass Co. (5201) jumped 7.3 percent in Tokyo after Nomura Holdings Inc. raised its rating to buy from neutral on its profit outlook. BHP Billiton Ltd. (BHP), the world’s biggest miner, gained 2.2 percent in Sydney after commodity prices advanced. Sharp Corp. sank 5.7 percent in Tokyo to a 37-year low after widening its loss forecast.
All major indexes in the Asia-Pacific region advanced. The benchmark MSCI Asia Pacific Index gained 1.7 percent to 119.02 as of 8:24 p.m. in Tokyo, its highest level since July 5. Almost five stocks rose for each that fell. The gauge declined last week after the European Central Bank failed to deliver immediate action to stem the region’s debt crisis and as the U.S. Federal Reserve refrained from adding stimulus.
“The U.S. payrolls data was a delightful surprise,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth management unit. The Swiss bank has about $1.5 trillion in assets under management. “The U.S. economic momentum has a pulse. Despite no central bank action last week, it looks clear that both the Federal Reserve and the ECB will act and they have adjusted their language to be able to intervene.”
The MSCI Asia Pacific Index (MXAP), which lists some stocks from emerging markets, gained 7.3 percent from this year’s lowest level in June through Aug. 3 amid speculation central banks from the U.S. to China and Europe would step up efforts to stimulate economic growth.
The regional benchmark traded at 12 times estimated earnings, compared with 13.5 times for the Standard & Poor’s 500 Index and 11.4 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average and South Korea’s Kospi Index (KOSPI) both rose 2 percent. Australia’s S&P/ASX 200 Index (AS51) increased 1.2 percent, while New Zealand’s NZX 50 Index gained 0.4 percent.
Singapore’s Straits Times Index advanced 0.7 percent, while Hong Kong’s Hang Seng Index (HSI) gained 1.7 percent. China’s Shanghai Composite Index added 1 percent after the nation’s regulators encouraged employees to buy shares in their own companies to bolster equities.
Futures on the S&P 500 rose 0.2 percent today. The gauge climbed 1.9 percent on Aug. 3 after a Labor Department report showed U.S. payrolls climbed more than forecast even as the jobless rate unexpectedly rose. Growth in the services industry accelerated in July from the month before.
The rally in stocks gained strength as members of German Chancellor Angela Merkel’s coalition parties signaled they won’t stand in the way of European Central Bank President Mario Draghi’s bond plan to relieve the region’s debt crisis.
Li & Fung rose 4.1 percent to HK$15.32 in Hong Kong. Mazda Motor Corp. (7261), a Japanese automaker that gets almost three- quarters of its revenue overseas, jumped 5.6 percent to 94 yen in Tokyo.
Commodity producers gained after oil for September delivery rose 4.9 percent on Aug. 3 in New York, while the London Metal Exchange Index of prices for six industrial commodities including copper and aluminum advanced 1.6 percent.
BHP rose 2.2 percent to A$32. Rio Tinto (RIO) Group, the world’s third-largest mining company, climbed 4.1 percent to A$54.13 in Sydney. Rio Tinto may raise its dividends this week by 34 percent, according to data compiled by Bloomberg. Inpex Corp., Japan’s top energy explorer, advanced 4.1 percent to 445,500 yen in Tokyo.
Asahi Glass surged 7.3 percent to 472 yen, its biggest gain since May 2009. Nomura raised its rating on the stock to buy from neutral on an improving profit outlook and bottoming out of prices in Europe for sheet and liquid-crystal display glass.
Sharp slumped 5.7 percent to 181 yen, extending its 28 percent drop on Aug. 3 after the company widened its loss forecast.
Hon Hai Precision Industry Co. (2317), the world’s largest contract manufacturer of electronics and a flagship of Foxconn Technology Group, gained 7 percent to NT$87.30 in Taipei after saying it plans to renegotiate the price of its investment in Sharp to less than the 550 yen per share it had agreed to in March. Foxconn Technology Co. (2354), an affiliate of Hon Hai that also plans to invest in the Japanese company, surged 6 percent to NT$106.
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