Asia’s benchmark stock index rose from a three-month low amid optimism the Federal Reserve will maintain record monetary stimulus. Japanese shares rallied the most in a month.
Man Wah Holdings Ltd. (1999), a furniture maker that gets 51 percent of its sales in the U.S., gained 9.2 percent in Hong Kong. Daiwa Securities Group Inc., Japan’s second-largest brokerage, rebounded 12 percent after slumping yesterday. Billabong International Ltd. (BBG), the Australian surfwear company that has breached debt-payment terms, plunged 49 percent after takeover talks with two suitors ended.
The MSCI Asia Pacific Index rose 0.9 percent to 134.68 as of 7:36 p.m. in Tokyo, snapping a three-day losing streak after yesterday closing at the lowest since Feb. 27. About two stocks gained for each that fell as all 10 industry groups advanced.
“It’s premature even to start debating about the Fed’s exit from stimulus as corporate activity continues to be sluggish, keeping the labor market from recovering dramatically,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 10.2 trillion yen ($102 billion) in assets. “The situation hasn’t changed for Japanese shares. It’s hard to imagine they will keep falling regardless of valuations.”
The MSCI Asia Pacific Index retreated 7.5 percent through yesterday from May 20, which was the highest close since June 2008. Asia’s benchmark gauge traded at 13 times average estimated earnings yesterday, compared with 14.9 for the Standard & Poor’s 500 Index and 13.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. Japan’s Topix (TPX) index was trading at 15.05 today, about 11 percent cheaper than the average since the start of 2010.
The Topix gained 2.6 percent in Tokyo, its biggest increase since May 7. Japan’s broadest equity measure has fallen 12 percent after touching a near five-year high on May 22. South Korea’s Kospi index was little changed. Australia’s S&P/ASX 200 Index rose 0.3 percent as the nation’s central bank kept its benchmark interest rate at a record low 2.75 percent. New Zealand’s NZX 50 Index lost 0.8 percent.
Hong Kong’s Hang Seng Index was little changed, and China’s Shanghai Composite Index retreated 1.2 percent. Singapore’s Straits Times Index was little changed, while Taiwan’s Taiex Index fell 0.1 percent.
Futures on the S&P 500 were little changed. The gauge advanced 0.6 percent yesterday, erasing losses after Federal Reserve Bank of Atlanta President Dennis Lockhart said central-bank officials are committed to record stimulus measures. Shares fell earlier after the Institute for Supply Management’s factory index unexpectedly slid to 49 in May, the lowest reading since June 2009.
Companies that do business in the U.S. advanced. Man Wah climbed 9.2 percent to HK$9.04 in Hong Kong. Techtronic Industries Co. (669), a maker of Ryobi power tools that gets about 73 percent of sales from North America, added 3 percent to HK$20.90.
Japanese exporters to the U.S. reversed losses after the yen fell against most of its major counterparts. Mazda Motor Corp. (7261), an automaker that generates 73 percent of its sales abroad, rose 2.7 percent to 385 yen after losing as much as 8.5 percent. Sony Corp. (6758), a consumer electronics exporter that gets 68 percent of its sales outside Japan, gained 3.7 percent to 2,009 yen. A weaker yen increases the value of overseas sales for exporters.
Brokerages in Japan rose the most among the Topix’s 33 industry groups after declining more than 25 percent from a May 20 high through yesterday. Daiwa soared 12 percent to 855 yen. Nomura Holdings Inc. (8604), Japan’s biggest brokerage by market value, surged 7.6 percent to 778 yen.
Nippon Suisan Kaisha Ltd. (1332), a Japanese maker of seafood products, jumped 10 percent to 212 yen after saying it will sell all of its holdings in Germany’s Leuchtturm Beteiligungs und Holding Germany AG, a frozen seafood distributor.
Among stocks that fell, Billabong slumped 49 percent to 23 Australian cents. Sycamore Partners Management and Altamont Capital Partners, which had been in separate talks to buy Billabong, are now in refinancing and asset-sale discussions with the Gold Coast, Australia-based retailer, it said in a statement today.
Nine Dragons Paper Holdings Ltd. (2689), a maker of paper and packaging materials co-founded by Cheung Yan, one of China’s richest women, slumped 7.5 percent to HK$5.28 in Hong Kong. The company may face more earnings downside risk if paper prices continue to weaken, Credit Suisse Group AG said.
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