Asian Stocks Rise on U.S. Housing, China Stimulus Hopes
Asian stocks gained, with the regional benchmark index heading for the highest close in two weeks, after U.S. new-home construction rose to a four-year high and Chinese shares rallied on speculation policy makers will add stimulus measures.
James Hardie Industries SE (JHX), the supplier of building materials that counts the U.S. as its key market, rose 2 percent in Sydney. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, added 1.8 percent. Angang Steel Co. jumped 7.4 percent after Hong Kong’s largest publicly traded steelmaker said it will swap assets with its China parent to help reduce losses.
The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 121.08 as of 7:45 p.m. in Tokyo, heading for its highest close since Nov. 9. About five shares rose for every four that fell on the gauge. The measure gained 11 percent through yesterday from this year’s low on June 4 as central banks added economic and showed a slowdown in China may be ending as Xi Jinping was named last week to replace Hu Jintao as head of the Communist Party and the nation’s military.
“China’s new leaders are expected to introduce more concrete measures to help the economy,” said Michiya Tomita, a Hong Kong-based fund manager at Mitsubishi UFJ Asset Management Co., which oversees $70 billion. “We’ve seen fundamental improvement in the Chinese economy. Europe’s sovereign debt crisis remains the biggest concern among investors.”
The Asian benchmark index erased gains of as much as 0.5 percent today as European finance ministers failed to agree on an aid package for Greece after battling with the International Monetary Fund over how to nurse the recession-wracked country back to fiscal health.
“We’ve seen lots of back and forth but nothing’s really changed,” said Masahiko Ejiri, a Tokyo-based fund manager for Mizuho Asset Management Co., which oversees about $45 billion. “We’re getting accustomed to this and do not expect that things will be improving dramatically. Most investors are still concerned about the euro zone.”
Japan’s Nikkei 225 Stock Average gained 0.9 percent. The nation’s exports fell for a fifth month, increasing pressure on the central bank to add stimulus measures as the world’s third- largest economy moves closer to recession. Elections next month are expected to hand power to opposition leader Shinzo Abe, who advocates more aggressive monetary easing.
China’s Shanghai Composite climbed 1.1 percent, the biggest advance since Nov. 1, reversing losses amid speculation that the new government will introduce measures to boost the economy and support the slumping equities market.
Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The S&P 500 gained 0.1 percent yesterday as the gain in housing starts countered a tumble in Hewlett-Packard Co. shares. Stocks declined earlier 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.
“A plan for resolving the nation’s longer-term budgetary issues without harming the recovery could help make the new year a very good one for the American economy,” Bernanke said yesterday at the Economic Club of New York.
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 in Washington. The median forecast of 82 economists called for an 840,000 pace. Permits for the construction of single-family homes also advanced to the highest in four years.
Exporters to the U.S. advanced. James Hardie gained 2 percent to A$8.81 in Sydney. Samsung Electronics Co. (005930), the world’s biggest maker of smartphones, rose 1.5 percent to 1.384 million won in Seoul.
Japanese exporters gained as the yen slid to a seven-month low after the Finance Ministry said overseas shipments fell 6.5 percent in October from a year earlier, leaving a trade deficit of 549 billion yen ($6.7 billion). A weaker currency boosts the value of overseas income at Japanese companies when repatriated.
Toyota Motor Corp. (7203), the world’s biggest carmaker, climbed 2.2 percent to 3,435 yen in Tokyo. Honda Motor Co. advanced 3.2 percent to 2,657 yen. Canon Inc., the world’s largest camera added 1 percent to 2,820 yen.
Chinese lenders and developers rose after the State Administration of Foreign Exchange said the government will waive some requirements for foreign investors to make it easier to bring money into and out of the country. Foreign investors will be exempt from needing regulatory pre-approval for opening bank accounts, remitting profits abroad and transferring money between different domestic accounts starting Dec. 17, it said.
ICBC, as China’s biggest bank is known, gained 1.8 percent to HK$5.15 in Hong Kong. China Construction Bank Corp. (939), the second-largest, climbed 3.4 percent to HK$5.84. China Overseas Land & Investment Ltd., a Chinese developer traded in Hong Kong, gained 2.7 percent to HK$21.25.
Angang Steel jumped 7.4 percent to HK$4.92. The company said it agreed to sell its 45 percent stake in Tianjin Tiantie, a cold-rolled steel venture, for 1.18 billion yuan ($189 million) to parent Anshan Iron & Steel Group. It also agreed to sell its 80 percent stake in Angang Putian, another cold-rolled steel plant, to the parent’s trading company in exchange for domestic steel trading assets, Angang said.
WestSide Corp. (WCL) jumped 3.9 percent to 40 Australian cents in Sydney. The company said it received a takeover proposal of 52 Australian cents a share and its board agreed not to solicit competing bids until the unidentified investor completes due diligence within three weeks.
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