Japan Stock Futures Gain as U.S. Home Building Boosts Exporters

Japanese stock futures gained as U.S. new-home construction rose to a four-year high, more evidence of a revival in the industry that’s helping propel the world’s biggest economy and boosting the outlook for Asian exporters. Australian shares were little changed.

American Depositary Receipts of Komatsu Ltd. (6301), the world’s second-biggest maker of construction and mining equipment that gets 80 percent of sales outside Japan, climbed 1 percent. ADRs of Sharp Corp. (6753) sank 2.1 percent after the TV maker said it will book a 25.3 billion yen ($311 million) one-time charge this quarter to eliminate jobs. David Jones Ltd., Australia’s second- largest department-store company, fell 0.8 percent as sales missed estimates.

Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 9,200 in Chicago yesterday, up from 9,120 in Osaka, Japan. They were bid in the pre-market at 9,190 in Osaka, at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index was little changed and New Zealand’s NZX 50 Index gained 0.1 percent.

“The foundations have been laid for a significant recovery in the U.S.,” said Peter Esho, chief market strategist at City Index Ltd., a provider of equities, bonds and currency trading in Sydney. “There is cause for some optimism. The housing market is finally starting to improve.”

Futures on the Standard & Poor’s 500 Index were little changed today. The S&P 500 gained 0.1 percent yesterday as the increase in housing starts tempered a tumble in Hewlett-Packard Co. shares. Stocks had earlier declined as Federal Reserve Chairman Ben S. Bernanke said the central bank doesn’t have the tools to offset the potential harm to the economy from the so- called fiscal cliff.

Budget Talks

If talks between President Barack Obama and the Republicans and Democrats fail to produce an agreement on the U.S. budget, it will trigger more than $600 billion in automatic tax increases and spending cuts that may throw the country into a recession.

Housing starts rose 3.6 percent to a 894,000, the fastest annual rate since July 2008 and exceeding all estimates in a Bloomberg survey, Commerce Department figures showed yesterday in Washington. The median forecast of 82 economists called for an 840,000 pace.

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 13.6 times estimated earnings, according to data compiled by Bloomberg News.

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

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. retreated 1.1 percent yesterday in New York.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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

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