Asian Stocks Rise on Bets China, U.S. to Stimulate Growth
Asian stocks rose, with the regional benchmark index headed for the longest winning streak in two months, on speculation China and the U.S. will take more measures to spur growth in the world’s two biggest economies.
Samsung Electronics Co. (005930), which gets 48 percent of its revenue in China and the Americas, rose 3 percent in Seoul. Fanuc Corp., the world’s biggest maker of industrial robots, gained 2.2 percent after Japan’s machinery orders beat estimates in July. China Eastern Airlines Corp., the nation’s second- largest carrier by passengers, climbed 4.7 percent in Hong Kong after announcing plans to raise $570 million.
The MSCI Asia Pacific Index rose 1.3 percent to 120.91 as of 7:26 p.m. in Tokyo, headed for a five-day advance, the longest winning streak since July. About four stocks gained for each that fell. Stocks have climbed since the European Central Bank announced an unlimited bond-buying program last week to tame the region’s debt crisis.
“If between the Federal Reserve, the European Central Bank and People’s Bank of China, we start to see some moderate easing, then definitely one of the asset classes that will benefit is equity,” said David Gaud, a senior portfolio manager at Edmond de Rothschild Asset Management in Hong Kong, which oversees 14 billion euros ($18 billion) in equities and convertible bonds. “In China, we should be able to see a bit more easing in the coming months. They’ve started already and there’s more room for improvement.”
The MSCI Asia Pacific Index gained 1.8 percent this quarter through yesterday as expectations of further stimulus measures overshadowed signs of a global economic slowdown. The Asian benchmark traded at 12.4 times estimated earnings, compared with 13.9 times for the Standard & Poor’s 500 Index (SPXL1) and 12 times for the Stoxx Europe 600 Index.
Japan’s Nikkei 225 Stock Average rose 1.7 percent. South Korea’s Kospi Index (KOSPI) added 1.6 percent as the government reported the jobless rate was unchanged in August. Australia’s S&P/ASX 200 advanced 0.8 percent, while New Zealand’s NZX 50 Index increased 1.2 percent.
The Shanghai Composite Index gained 0.3 percent, while Hong Kong’s Hang Seng Index advanced 1.1 percent. Taiwan’s Taiex Index (TWSE) gained 1.1 percent and Singapore’s Straits Times Index added 0.4 percent.
Futures on the S&P 500 gained 0.5 percent today. The index rose 0.3 percent in New York yesterday before the Federal Open Market Committee starts a two-day meeting today to discuss additional measures to stimulate the U.S. economy. Shares in Europe climbed after Germany’s Federal Constitutional Court cleared the way for a permanent euro-area bailout fund.
Exporters to the U.S. rose. Samsung added 3 percent to 1.294 million won in Seoul. Honda Motor Co. (7267), a carmaker that gets 44 percent of its sales in North America, rose 1.5 percent to 2,629 yen.
The MSCI Asia Pacific measure reversed losses yesterday as the relative value of Japanese shares in the index rose with the yen’s advance. The yen reached 77.70 per dollar yesterday, the highest level since June 1.
Chinese Premier Wen Jiabao signaled there’s more room for fiscal and monetary policy to support growth, saying China still has “ample strength” to meet its economic goals for the year. Wen spoke yesterday at the World Economic Forum in the Chinese city of Tianjin.
“The market is getting confident that governments won’t let economies get worse, as expectations are mounting in the U.S. for more monetary easing and China expands public investment,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.
Chinese banks rose. Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, climbed 1 percent to HK$4.26 in Hong Kong. China Construction Bank Corp. gained 1.4 percent HK$5.07.
Japanese machinery makers advanced after a report showed the nation’s machinery orders rose 4.6 percent in July. The median estimate of 29 economists surveyed by Bloomberg News was for a 2 percent increase. Fanuc advanced 2.2 percent to 13,170 yen. Mitsubishi Heavy Industries Ltd. (7011) rose 1.3 percent to 324 yen.
China Eastern Airlines advanced 4.7 percent to HK$2.43 after announcing plans to raise $570 million by selling shares to its state-owned parent.
Among stocks fell, Oki Electric Industry Ltd. slumped 11 percent to 89 yen in Tokyo after saying improper accounting at its Spanish unit will cut profit.
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