Most Asian stocks gained, with the Shanghai Composite Index posting its biggest advance in three years, as China’s manufacturing survey added to signs of recovery in the world’s second-largest economy.
Agricultural Bank of China Ltd., the nation’s No. 3 lender, climbed 2.4 percent in Hong Kong. Gome Electrical Appliances Holding Ltd. (493) jumped 7.2 percent after the Chinese retailer was rated new buy at Citigroup Inc. Largan Precision Co., a supplier of camera lenses to Apple Inc., sank 6.9 percent in Taipei on speculation shipments will slow.
The MSCI Asia Pacific Index added less than 0.1 percent to 127.26 as of 7:05 p.m. Tokyo time, erasing losses of as much as 0.3 percent. If the gauge rises though today, it will complete its longest streak of gains since January 2004. The measure advanced 12 percent this year through yesterday amid signs the world’s biggest economies are improving and optimism U.S. lawmakers will agree on a budget deal to avert the so-called fiscal cliff.
“Valuations don’t look particularly excessive to me,” said Stephen Corry, a Hong Kong-based chief investment strategist at LGT Group, a private banking and asset management group that manages about $102 billion. “With the reacceleration of the Chinese economy and a better cyclical outlook for the first half of next year, people are more confident in the price- earnings multiples that they’re paying.”
About seven shares rose for every six that fell on the MSCI Asia Pacific Index (MXAP), which is poised to advance for a fourth week, after central banks took steps to support economic growth. Shares on the Asian benchmark index traded at 14.3 times estimated earnings, compared with 13.7 times for the S&P 500 Index and 12.7 times for the Stoxx Europe 600.
China’s Shanghai Composite Index jumped 4.3 percent, the most since October 2009. A report showed the nation’s manufacturing may expand at a faster pace this month, suggesting the factory recovery in the world’s second-biggest economy will withstand a slowdown in exports.
The December preliminary reading was 50.9 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. That compares with the 50.8 median estimate in a Bloomberg News survey of 12 economists and a final reading of 50.5 for November, the first time in 13 months it was above the expansion-contraction dividing line of 50.
“The data show the economic recovery is on a solid footing,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million.
Agricultural Bank of China advanced 2.4 percent to HK$3.80 in Hong Kong. China Construction Bank Corp. (939), the nation’s second-largest lender, added 0.8 percent to HK$6.28. Aluminum Corp. of China Ltd., the country’s biggest supplier of the light metal, jumped 4.3 percent to HK$3.61.
Gome Electrical climbed 7.2 percent to 89 Hong Kong cents after Citigroup said the retailer’s online business may become profitable in 2014 and that more affordable housing will boost demand for appliances in China.
Hong Kong’s Hang Seng Index gained 0.7 percent, while South Korea’s Kospi Index dropped 0.4 percent. Taiwan’s Taiex Index fell 0.8 percent. Australia’s S&P/ASX 200 Index was little changed.
Japan’s Nikkei 225 Stock Average slipped 0.1 percent, erasing gains of as much as 0.3 percent. Big Japanese manufacturers became the most pessimistic since the aftermath of the global recession as a diplomatic dispute with China and Europe’s austerity measures hurt exports, according to the Bank of Japan’s quarterly Tankan survey.
The Nikkei 225 advanced 2.2 percent this week, extending gains for a fifth week, as the yen fell to the weakest level since March amid bets that opposition leader Shinzo Abe will win Japanese elections this weekend and push the central bank to expand monetary easing.
Exporters advanced as the weaker currency boost overseas income at Japanese companies when repatriated. Sony Corp., the maker of Bravia televisions and PlayStation game consoles, gained 2.3 percent to 906 yen. Renesas Electronics Corp. (6723), the chipmaker being bailed out by a government-backed fund and its customers, rose 3.1 percent to 300 yen.
Sharp Corp. (6753), the maker of Aquos televisions, jumped 7.6 percent to 269. Japan Securities Finance Co., which provides loans for margin transactions, said it may set a limit for the trades in the stock. Margin account holdings that profit when the electronic maker’s shares fall jumped to 49.6 million shares yesterday, the most since at least 1997, according to data compiled by Bloomberg.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent today. The S&P 500 slid 0.6 percent yesterday, snapping a six- day advance on the benchmark index, as a standoff in federal budget negotiations overshadowed a decline in jobless claims and a rebound in retail sales.
President Barack Obama and House Speaker John Boehner met for 50 minutes yesterday at the White House on the budget stalemate. The White House and Boehner’s office released almost identical statements saying the meeting was “frank” and that “the lines of communication remain open.”
A budget agreement would help avert the fiscal cliff, which would result in more than $600 billion in spending cuts and tax increases scheduled to start taking effect next month.
SC Global Developments Ltd. (SCGD) jumped 8.5 percent to S$1.975 in Singapore after Wheelock Properties Ltd., the second-biggest shareholder of the property developer, bought 1.07 million SC Global shares at S$1.81 each. The purchase price was above the S$1.80 offer by chairman Simon Cheong, who wants to take the company private.
Among stocks that dropped, Largan Precision (3008) declined 6.9 percent to NT$784 in Taipei, extending losses for a fourth day. There’s speculation shipments have peaked in November and may decline 30 percent in the first quarter due to weaker iPhone orders, Mega Securities analyst Huang Chien-hao said by phone.
APN News & Media Ltd. (APN) slumped 16 percent to 26.5 Australian cents in Sydney after the newspaper publisher said second-half revenue will decline.
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