Asian Stocks Rise on U.S. Data, Easing China Cash-Crunch

Asian stocks rose for the first time in three days after better-than-estimated U.S. data bolstered the outlook for the world’s largest economy and China’s central bank sought to ease cash crunch concerns.

James Hardie Industries SE (JHX), a supplier of building materials that gets about 70 percent of sales from the U.S., climbed 4.6 percent in Sydney. Industrial & Commercial Bank of China Ltd., the world’s biggest lender, jumped 6.8 percent in Hong Kong after the nation’s central bank injected liquidity to stabilize money-market rates. Woori Finance Holdings Co. gained 5.4 percent in Seoul after the government announced plans to separate the nation’s largest financial group by assets into three parts.

The MSCI Asia Pacific Index added 0.9 percent to 126.17 as of 7:14 p.m. in Tokyo, with almost two shares rising for each that fell on the measure. The gauge dropped 13 percent through yesterday from this year’s high on May 20 after Federal Reserve Chairman Ben S. Bernanke said policy markers may start dialing down stimulus if the U.S. economy shows sustained improvement, and as money-market rates in China surged to records.

“More growth means equities have a very good fundamental reason to continue rallying as we look through the noise,” Michael Kurtz, Hong Kong-based head of global equity strategy at Nomura Holdings Inc., said on Bloomberg Television. “China stocks are starting to look substantially undervalued. Investors with a medium to long-term perspective should be taking this as an opportunity to go shopping.”

Regional Gauges

Australia’s S&P/ASX 200 Index gained 1.6 percent and New Zealand’s NZX 50 Index increased 1.8 percent. Singapore’s Straits Times Index rose 0.5 percent. The Philippine Stock Exchange Index (PCOMP) jumped 5.7 percent, heading for its biggest advance since November 2008. South Korea’s Kospi index rose 0.2 percent.

Taiwan’s Taiex index rose 1.6 percent after lawmakers voted to roll back provisions of capital gains tax on stock sales of more than NT$1 billion ($33 million).

Japan’s Topix index fell 0.9 percent and the benchmark Nikkei 255 Stock Average dropped 1 percent. Shares erased earlier gains as the Japanese yen reversed losses.

Hong Kong’s Hang Seng Index advanced 2.4 percent. The Hang Seng China Enterprises Index of mainland companies, also known as the H-share index, gained 3.3 percent, the most since January.

China’s Shanghai Composite Index slipped 0.4 percent as concern about the impact of a cash crunch on the broader economy lingered even after the central bank pledged to ensure stability in the money markets.

Liquidity Injection

The cost of locking in China’s interest rates fell the most since 2008 after the central bank pledged to tackle the nation’s worst cash crunch in at least a decade. The People’s Bank of China has provided liquidity to some financial institutions to stabilize money-market rates and will use short-term liquidity operations and existing lending-facility tools to ensure steady markets, according to a statement posted on its website yesterday.

China’s benchmark Shanghai index dropped almost 20 percent through yesterday from its February high amid concern the cash crunch will curb growth in the world’s second-largest economy. The gauge traded at 8 times estimated 12-month earnings, the lowest level on a weekly basis since Bloomberg began compiling the data in 2006. That compares with 6.3 times for the H-share index, which tracks shares of mainland companies listed in Hong Kong.

Shares on the Asia-Pacific gauge traded at 12.1 times average estimated earnings yesterday compared with 14.4 for the Standard & Poor’s 500 Index and 12.4 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Economy

Futures on the Standard & Poor’s 500 Index added 0.4 percent today. The S&P 500 added 1 percent yesterday after government data showed bookings for U.S. durable goods rose 3.6 percent in May, while separate reports on house prices, new-home sales and consumer confidence topped economists’ estimates.

“The whole story over the last few weeks has been a better U.S. economy than people expected,” Michael Shaoul, chairman and chief executive officer of Marketfield Asset Management LLC, where he helps manage the MainStay Marketfield fund that beat 96 percent of its peers in the past five years, told Bloomberg TV. “That is ultimately going to be good for the equity market.”

Exporters advanced. James Hardie climbed 4.6 percent to A$9.33 in Sydney. Panasonic Corp., Japan’s second-biggest television maker, increased 3.1 percent 741 yen. Techtronic Industries Co. (669), the maker of Ryobi power tools that gets 73 percent of sales from North America, rose 3 percent to HK$17.92 in Hong Kong.

Hon Hai Jumps

Hon Hai Precision Industry Co. (2317), the world’s biggest contract manufacturer of electronics, jumped 4 percent to NT$73 in Taipei. The company will increase full-year profit this year, Chairman Terry Gou said at the company’s annual shareholders’ meeting where a N$1.5 cash dividend per share was approved.

PT Kalbe Farma (KLBF), Southeast Asia’s biggest drug maker, surged 11 percent to 1,320 rupiah in Jakarta. HSBC Holdings Plc raised its rating to overweight from neutral, saying the company will benefit from increasing healthcare spending by the Indonesian government.

Chinese lenders gained. ICBC, as the nation’s biggest bank is known, jumped 6.8 percent to HK$4.70 in Hong Kong. China Construction Bank Corp. increased 6.5 percent to HK$5.41. Agricultural Bank of China Ltd. rose 4.3 percent to HK$3.14.

Woori Finance gained 5.4 percent to 10,400 won in Seoul. The company’s lenders Kwangju Bank and Kyongnam Bank will be put up for sale on July 15, the Financial Services Commission said in e-mailed statement. Bidding for Woori’s brokerage, asset management and savings bank businesses will begin in August, while Woori Bank, along with the credit card and other units will be sold next year, it said.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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