Asian Stocks Erase Losses as Australian Lenders Rise
Asian stocks erased earlier losses amid speculation yesterday’s decline on the regional benchmark index was excessive after Japanese exporters pared losses as the yen fell. Australian equities gained after dropping the most in nine months yesterday.
Commonwealth Bank of Australia, the nation’s largest lender, rose 1.3 percent after the central bank governor said recent interest-rate cuts should be given time to do their work. Honda Motor Co. (7267), Japan’s second largest carmaker by market value, pared its loss to 0.4 percent after falling as much as 2 percent. Belle International Holdings Ltd. extended its record drop on ratings downgrades.
The MSCI Asia Pacific Index was little changed at 133.50 as of 2 p.m. in Tokyo after falling as much as 0.6 percent. The measure has risen 0.5 percent this week. Shares declined earlier as European reports added to concern the region’s recession is deepening.
“In Asia, it’s one of those days when investors sit on the sidelines and alternatively, if they missed out on a rally, this is an opportunity to buy stocks at better prices in a pullback in the market,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $126 billion under management. “I think it’s a correction. I don’t think it’s the start of a new slump in the market.”
Asian stocks plunged yesterday, with the MSCI Asia Pacific Index losing 1.3 percent, amid concern the Federal Reserve may scale back U.S. stimulus and as China called for increased property curbs. Asia’s benchmark traded at 14.7 times estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index (SPXL1) and 12.2 for the Stoxx Europe 600, according to data compiled by Bloomberg.
Australia’s S&P/ASX 200 Index jumped 0.9 percent today after falling the most in nine months yesterday. New Zealand’s NZX 50 Index rose 1.1 percent. South Korea’s Kospi (KOSPI) Index gained 0.1 percent. Japan’s Nikkei 225 Stock Average (NKY) rose 0.5 percent as the yen dropped against all of its 16 major counterparts.
China’s Shanghai Composite Index (SHCOMP) was little changed after yesterday capping the biggest drop since November 2011 as a report showed home prices declined in some cities in January. Hong Kong’s Hang Seng Index declined 0.3 percent. Taiwan’s Taiex Index (TWSE) was little changed and Singapore’s Straits Times Index dropped 0.2 percent.
Australian lenders advanced as Reserve Bank of Australia Governor Glenn Stevens endorsed the current level of interest rates. Commonwealth Bank added 1.3 percent A$65.62. Westpac Banking Corp. (WBC), Australia’s No. 2 lender by market value, advanced 1.5 percent to A$29.92.
Futures on the Standard & Poor’s 500 Index gained 0.3 percent today. The gauge declined 0.6 percent in New York yesterday. The Federal Reserve’s Bank of St. Louis President James Bullard said the U.S. unemployment rate may drop to 6.5 percent by the middle of next year and prompt the central bank to raise its benchmark interest rate.
In Europe, the Stoxx Europe 600 Index sank 1.5 percent, its biggest tumble since Feb. 4, as euro-area services and manufacturing shrank in February by more than economists had forecast.
Belle International dropped 3.8 percent to HK$14.70 after its rating was cut at brokerages including Nomura Holdings Inc. (8604) and SWS Research Co. The retailer of women’s shoes plunged a record 17 percent yesterday after saying 2012 profit will be at the lower end of analysts’ estimates.
Of the 356 companies on the MSCI Asia Pacific Index that have reported quarterly earnings and for which Bloomberg has estimates, 50 percent exceeded profit expectations.
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