Japan, Australian Stock Futures Rise on U.S. Data, ECB
Japan and Australian stock futures rose after consumer confidence and leading economic indicators in the U.S. topped estimates and amid optimism the European Central Bank may set limits on government bond yields to contain the debt crisis.
American Depositary Receipts of Sony Corp. (6758), Japan’s largest consumer electronics exporter, gained the 0.6 percent. ADRs of BHP Billiton Ltd., the world’s No. 1 mining company, advanced 0.4 percent. Japan’s Kirin Holdings Co. (2503) may be active after Heineken NV raised its offer for a controlling stake in Asia Pacific Breweries Ltd. to S$5.6 billion ($4.5 billion).
Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 9,215 in Chicago on Aug. 17, up from 9,190 in Osaka, Japan. They were bid in the pre-market at 9,200 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index advanced 0.1 percent today. New Zealand’s NZX 50 Index rose 0.2 percent in Wellington.
“The positives are that the economic-data pulse has improved, beating market expectations, particularly in the U.S.,” 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. “Markets continue to price in additional central- bank stimulus. The prospect of European quantitative easing appears very much the base case.”
Futures on the Standard & Poor’s 500 Index were little changed today. The underlying gauge is less than one point away from a four-year peak of 1,419.04 set on April 2. The Dow Jones Industrial Average last week added 67.25 points, or 0.5 percent, to 13,275.20. On the last day of trading, it touched the highest level since December 2007.
Confidence among U.S. consumers unexpectedly improved in August, boosting the prospect of stronger household spending this quarter, according to the Thomson Reuters/University of Michigan preliminary index of consumer sentiment.
The Conference Board’s index of U.S. leading economic indicators, a gauge of the outlook for the next three to six months, climbed more than forecast in July. This helped cap stock-market gains for the week as Germany backed the European Central Bank’s bond-buying plan.
The MSCI Asia Pacific Index (MXAP) rose last week for a third- straight week, its longest winning streak since the five days ended March 2, amid optimism central banks would enact more measures to promote economic growth. Still, the Asia-Pacific benchmark has retreated 6.4 percent from a Feb. 29 high amid concern China’s economy is slowing and Europe’s debt crisis is deepening.
The ECB is considering setting limits on yields of euro- area sovereign debt by pledging unlimited bond purchases, Germany’s Spiegel magazine reported, without saying where it obtained the information.
The policy will be decided at the September meeting of the ECB’s governing council, Spiegel said. The Frankfurt-based central bank would immediately publish bond purchases after making them, the magazine added. An ECB official declined to comment on the article.
ECB President Mario Draghi said on Aug. 2 that the central bank may buy government debt in unison with the region’s bailout funds to address elevated yields that are “related to fears of the reversibility of the euro.” German Chancellor Angela Merkel backed the ECB’s insistence on conditions for helping reduce borrowing costs on Aug. 16, saying Germany is “in line” with the central bank’s approach to defending the euro.
Stocks on the Asian regional benchmark, which includes companies from emerging countries, were valued at 12.6 times estimated earnings on average, compared with 13.7 times for the Standard & Poor’s 500 Index and 11.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Of the 469 companies in the Asia-Pacific index that have reported quarterly earnings since May 16, and for which Bloomberg has estimates, about 54 percent have failed to meet projections.
The Thomson Reuters/Jefferies CRB Index (CRY) of raw materials climbed 0.4 percent Aug. 17, a fourth day of gains. The London Metals Exchange Index of six primary metals rose 1.2 percent.
Options traders are charging the biggest premium since March to protect against losses in Chinese companies on signs that a slowdown in the world’s second-largest economy is worse than economists estimated.
The AlphaShares Chinese Volatility Index, derived from options on companies listed in Hong Kong, traded at a premium of as much as 41 percent over the Chicago Board Options Exchange Volatility Index last week, the biggest gap since March 29. The spread compares with a 10 percent discount a year earlier.
The Bloomberg China-US Equity Index of the most-traded Chinese companies in New York and Hong Kong’s Hang Seng China Enterprises Index both fell 0.8 percent last week.
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