Most Asian Stocks Rise; Japan Shares Drop as Streak Ends

Most Asian shares outside Japan rose after Chinese industrial profits increased for a fourth month. Japan’s Nikkei 225 Stock Average retreated after capping its longest weekly winning streak in more than 40 years.

Anhui Conch Cement Co. led gains among Chinese makers of the material in Hong Kong after Shenyin & Wanguo Securities Co. recommended the sector. Nintendo Co. and Sony Corp. (6758) climbed more than 3.4 percent on a report China may lift a ban on imports of game consoles. Fanuc Corp. and Hitachi High-Technologies Corp. each slumped more than 7 percent in Tokyo on earnings concern.

More than three stocks rose for every two that fell today on the MSCI Asia Pacific excluding Japan Index, which slipped 0.5 percent at 7:36 p.m. in Hong Kong. The regional gauge is denominated in U.S. dollars so declines of more than 1 percent today by the Taiwan dollar and South Korean won reduced the value of companies in the measure. The gauge gained 2.1 percent this year through Jan. 25 amid signs of recovery in the world’s two biggest economies.

“Asian markets tend to do well when global economic prospects are improving,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd.,which manages about $51 billion. “Around the world you have prospects of improving economies and therefore improving corporate earnings. The two largest economies are behaving in a positive fashion, and Japan has announced a lot of policies that are more reflationary.”

The MSCI Asia Pacific Index, which includes Japanese companies, lost 0.3 percent to 131.3. The gauge rallied 10 percent from Nov. 14 through Jan. 25, as the announcement of Japanese elections sparked optimism a new government would add stimulus to fight deflation.

Relative Value

The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.3 times average estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg

Japan’s Nikkei 225 (NKY) slid 0.9 percent. The gauge on Jan. 25 capped an 11-week advance, the longest such streak since at least 1970 as the yen weakened, boosting the earnings outlook for exporters. Volume on the equity benchmark was about 7 percent lower than the 30-day intraday average.

“In the short-term, investors are looking at bad earnings results as a reason to sell, especially as stocks rose a bit too fast in such a short space of time,” said Masayuki Kubota, who helps oversee the equivalent of $1.8 billion at Daiwa SB Investments Ltd. in Tokyo. “I’m still optimistic about the future of stocks.”

Outlook Boosted

Japan’s Cabinet Office today boosted its outlook for real gross-domestic-product growth to 2.5 percent in the year to March 31, 2014, up from a previous projection of 1.7 percent.

South Korea’s Kospi Index retreated 0.4 percent today even after consumer confidence climbed to the highest level in eight months as incoming President Park Geun Hye pledges to boost economic growth and welfare spending.

South Korea’s won and the Taiwan dollar tumbled the most in 16 months against the dollar as the yen’s slide to a 2 1/2-year low fanned speculation central banks will seek weaker exchange rates to protect exports.

Samsung Electronics Co., the world’s largest maker of smartphones, dropped 3.2 percent to 1.372 million won. The company warned about a slowdown in global demand and said a stronger won will cut operating profit this year.

Taiwan’s Taiex Index rose 0.6 percent. Singapore’s Straits Times Index gained 0.2 percent, Hong Kong’s Hang Seng Index (HSI) rose 0.4 percent and China’s Shanghai Composite Index jumped 2.4 percent to its highest close since June 2012. Markets in Australia are shut today.

China Profit

Chinese shares gained after mainland industrial companies’ profit rose 17 percent to 895 billion yuan ($144 billion) in December from a year earlier, the National Bureau of Statistics said yesterday in Beijing.

Cement companies rose in Hong Kong after Shenyin & Wanguo said demand for the material may exceed expectations this year on infrastructure investment, rising property sales and urbanization. Anhui Conch advanced 3.5 percent to HK$29.75. China National Building Material Co. increased 2.6 percent to HK$12.06, while China Shanshui Cement Group Ltd. (691) gained 2.1 percent to HK$5.48.

China Coal Energy Co. advanced 1.2 percent to HK$8.62 in Hong Kong. Sany Heavy Industry Co., a construction machinery maker, rose 5.2 percent to 11.15 yuan in Shanghai.

U.S. Shares

Futures on the S&P 500 were little changed today. The measure gained 0.5 percent on Jan. 25 amid better-than-estimated corporate earnings, rising an eighth day to cap its longest winning streak since 2004.

Nintendo, which produces the Wii gaming console, jumped 3.4 percent to 9,630 yen in Osaka, while PlayStation 3 maker Sony surged 9.1 percent to 1,407 yen in Tokyo. The companies climbed after China Daily reported the nation is considering lifting a ban on the manufacture, sale and import of game consoles that has been in place since 2000, citing an unidentified government official.

Korea Exchange Bank (004940) advanced 6.3 percent to 7,790 won after Hana Financial Group Inc. announced a buyout plan for the Seoul- based lender. Hana gained 3.2 percent to 40,500 won.

Fanuc and Hitachi High-Tech (8036) dropped the most on the MSCI Asia Pacific Index after cutting profit forecasts. Fanuc fell 7 percent to 13,550 yen in Tokyo after reducing its profit forecast by 15 percent for the fiscal year, citing the strong yen. Hitachi High-Tech tumbled 10 percent to 1,768 yen after lowering its operating profit forecast 33 percent for the year.

China Cosco Holdings Co., the nation’s biggest shipping company, fell 5.1 percent to HK$4.08 in Hong Kong, the biggest drag on the MSCI Asia Pacific excluding Japan Index. The company said it faces trading restrictions on its China shares amid a forecast for a “significant” loss in 2012.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Anna Kitanaka in Tokyo at akitanaka@bloomberg.net.

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

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