Asian Stocks Outside Japan Advance on U.S. Home Sales

Asian stocks outside Japan gained, with a regional index poised to advance for a second day, as U.S. home sales beat economist estimates, boosting optimism in the world’s largest economy.

Techtronic Industries Co. (669), a power tools maker that gets 72 percent of sales from North America, rose 3.5 percent in Hong Kong. Osaka Securities Exchange Co. added 1.9 percent after shareholders approved its merger with Tokyo Stock Exchange Group Inc. Olam International Ltd. sank 7.5 percent in Singapore as it resumed trading after short-seller Carson Block questioned the commodity trader’s accounting methods.

The MSCI Asia Pacific Excluding Japan Index (MXAPJ) gained 0.3 percent to 435.95 as of 8:52 p.m. in Tokyo, with about the same number of shares rising as falling. The measure rose for a second day after President Barack Obama started talks with Republicans and Democrats on a U.S. budget agreement to avert the so-called fiscal cliff. Failure to strike a deal will trigger more than $600 billion in automatic tax increases and spending cuts that may throw the country into a recession.

“There’s a greater sense of urgency to resolve the fiscal cliff,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management, which oversees about $165 billion. “Both sides seem more willing to strike some sort of compromise. Barring any shocks, economic data in the U.S. is suggesting a steady recovery.”

Australia’s S&P/ASX 200 Index gained 0.6 percent. The Reserve Bank of Australia said more interest-rate reductions may be appropriate to spur economic growth as the nation’s mining boom wanes, minutes of its Nov. 6 policy meeting showed today.

BOJ Meeting

South Korea’s Kospi Index (KOSPI) climbed 0.6 percent. Taiwan’s Taiex Index added 0.2 percent, while Singapore’s Straits Times Index increased 0.3 percent. Hong Kong’s Hang Seng Index fell 0.2 percent. China’s Shanghai Composite Index lost 0.4 percent.

Japan’s Nikkei 225 Stock Average (NKY) slipped 0.1 percent, its first decline in five days, as brokerages and utilities retreated after a rally fueled by speculation next month’s elections will yield a new government advocating more economic stimulus. The Bank of Japan today held off from more monetary easing after expanding asset purchases in September and October. The decision was predicted by 22 economists surveyed by Bloomberg News.

Futures on the Standard & Poor’s 500 Index were little changed after falling as much as 0.3 percent today. The S&P 500 rose the most in two months yesterday as Obama expressed confidence on a budget agreement with Congress and sales of previously owned U.S. homes climbed in October.

Talks Constructive

House Speaker John Boehner, a Republican, last week described U.S. budget discussions as constructive and said he would accept increased government revenue coupled with spending cuts. Congress is now in recess for Thanksgiving until Nov. 26.

“Confidence is growing that a U.S. budget deal can be reached, as politicians from both parties continue to make some positive comments on working together,” said Stan Shamu, a Melbourne-based strategist at IG Markets, a provider of trading services for equities, currencies and commodities. “Better- than-expected existing home sales data has also helped to lift sentiment.”

Exporters to the U.S. advanced. Techtronic jumped 3.5 percent to HK$15.50 in Hong Kong. Quanta Computer Inc. (2382), the world’s top contract manufacturer of laptops, rose 1.9 percent to NT$70.30 in Taipei. LG Display Co., the world’s second- largest maker of liquid-crystal displays, climbed 4 percent to 36,050 won in Seoul.

Samsung Patents

Samsung Electronics Co., the world’s biggest maker of smartphones, gained 2.4 percent to 1.364 million won in Seoul. The U.S. International Trade Commission said yesterday it will review “in its entirety” a judge’s Sept. 14 findings that cleared Apple of claims it violated four Samsung patents. The commission, which has the power to block imports of products that infringe U.S. patents, is scheduled to make a final decision on Jan. 14.

Osaka Securities Exchange Co. added 1.9 percent to 326,000 yen. Shareholders approved a $1.6 billion merger with Tokyo Stock Exchange Group Inc. in a bid to reinvigorate the country’s securities markets. The combined company, called the Japan Exchange Group, could save 7 billion yen ($86 million) a year by integrating their information technology systems.

Fletcher Building Ltd. rose 3.7 percent to NZ$7.65 in Wellington after New Zealand’s biggest maker of building products said operating profit will rise as much as 22 percent in the year ending June 30.

Lee & Man Paper Manufacturing Ltd. (2314) jumped 11 percent to HK$4.20 in Hong Kong. The maker of packaging products posted higher first-half profit and announced an interim dividend of 5 Hong Kong cents per share.

Olam Slumps

Of the 565 companies on the MSCI Asia Pacific Index (MXAP) that includes Japan that posted quarterly results since Oct. 1, and for which earnings estimates were available, 55 percent fell short of expectations, according to data compiled by Bloomberg News.

Among stocks that declined today, Olam slumped 7.5 percent to S$1.61 in Singapore. Block, a lawyer who has successfully bet against Chinese companies that trade in North America after questioning their accounting methods, said he is betting against the stock. Olam, which had a record level of shorts as of Nov. 15, is booking profits on transactions before it’s clear how the deals will work out, Block said.

The MSCI Asia Pacific Index gained 11 percent from this year’s low on June 4 through yesterday as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending. The Asian benchmark index traded at 13.4 times estimated earnings, compared with 13.3 times for the S&P 500 Index and a multiple of 12.1 for the Stoxx Europe 600.

France today lost its top credit rating with Moody’s Investors Service, dealing a blow to President Francois Hollande’s efforts to show budget credibility as Europe’s second-largest economy stalls.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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