Asian Stocks Rise on U.S. Reports, Spain Rating
Asian stocks advanced, with the regional benchmark index headed for the biggest gain in a month, after U.S. industrial production beat estimates and Spain retained its investment-grade credit rating from Moody’s Investors Service.
Mobile-phone maker LG Electronics Inc. (066570), which gets about 45 percent of its sales from North America and Europe, rose 2.5 percent in Seoul. Fujikon Industrial Holdings Ltd., which manufactures electronic products, surged 9.8 percent in Hong Kong after saying it expects first-half profit to rise. Ten Network Holdings Ltd., Australia’s third-ranked television broadcaster, slumped to a record low in Sydney as a plan to sell its Eye Corp. billboard unit faltered.
The MSCI Asia Pacific Index rose 1 percent to 122.9 as of 8:25 p.m. in Tokyo, headed for the biggest advance since Sept. 14. More than two stocks gained for each that fell on the measure, with all 10 of its industry groups climbing. Lawmakers in Germany toned down the rhetoric in opposition to giving further financial aid to other European countries.
“We see good signs of stabilization and we can probably say the economy is not going backwards” in the U.S., said Tim Leung, a portfolio manager who helps manage about $1.5 billion at IG Investment Ltd. in Hong Kong. “The market is enjoying a moment of relatively less hostile news from Europe.”
The MSCI Asia Pacific Index rebounded 12 percent through yesterday from this year’s low on June 4 as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 12.9 times estimated earnings on average, compared with 13.9 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index.
Japan’s Nikkei 225 Stock Average rose 1.2 percent. Australia’s S&P/ASX 200 added 0.8 percent and New Zealand’s NZX 50 Index climbed 0.6 percent. South Korea’s Kospi Index advanced 0.7 percent.
Hong Kong’s Hang Seng Index gained 1 percent and China’s Shanghai Composite Index rose 0.3 percent. Singapore’s Straits Times Index was little changed and Taiwan’s Taiex Index (TWSE) fell 0.1 percent.
Futures on the S&P 500 climbed 0.2 percent today. The equity gauge surged 1 percent yesterday, its biggest gain in a month, as a report showed industrial production rose more than expected in September and corporate earnings topped estimates. A report on Oct. 15 showed retail sales gained more than expected last month, adding to signs of a recovery.
Moody’s retained Spain’s investment-grade credit rating, saying the European Central Bank’s willingness to buy the nation’s debt reduced the risk of losing market access. Spain avoided joining euro-region peers Cyprus, Portugal, Ireland and Greece in falling below investment grade.
“The U.S. recovery is picking up and the momentum seems to last, given household data is also strong,” said Takeru Ogihara, chief strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third-largest lender by market value. “Spain got its rating maintained, damping risk on yield gains for now. That will buy time for officials to tackle the situation.”
Exporters to the U.S. and Europe advanced. LG Electronics added 2.5 percent to 70,300 won. Techtronic Industries Co., a maker of power tools that gets about 72 percent of sales from North America, advanced 3.2 percent to HK$13.50 in Hong Kong. Cosco Pacific Ltd. (1199), which operates a port in Greece, gained 5.8 percent to HK$11.64.
Investors are waiting for a Chinese report tomorrow that may show the world’s second-largest economy expanded 7.4 percent in the third quarter from a year earlier, according to the median estimate of economists surveyed by Bloomberg. That would be the slowest pace of growth since the first quarter of 2009 and the seventh straight quarter of deceleration.
Fujikon Industrial jumped 9.8 percent to HK$2.24 in Hong Kong after saying it expects first-half profit to rise and that gross profit margin for its new Bluetooth products could be more than 20 percent.
Among stocks that fell, Ten Network Holdings plunged 7.5 percent to 31 Australian cents, the lowest level on record. Champ Private Equity said it’s ending plans to buy Ten Network’s Eye Corp. billboard unit.
Companies that supply Intel Corp. (INTC) fell after the industry bellwether forecast fourth-quarter profit margins that missed analysts’ estimates. Advantest Corp. (6857), the world’s biggest maker of memory-chip testers, slid 2.2 percent to 918 yen in Tokyo.
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