Asian stocks outside Japan rose after better-than-estimated U.S. jobs data added to signs that the world’s largest economy is recovering, boosting the earnings prospects for exporters.
CSL Ltd. (CSL), a maker of blood-derived therapies that gets about 38 percent of sales in the U.S., gained 3.5 percent in Sydney. Cnooc Ltd. (883), China’s largest offshore energy explorer, added 2.1 percent in Hong Kong as crude oil traded near a 14-month high. Dentsu Inc., a Japanese advertising company that bought Aegis Group Plc, sank 9.2 percent after saying it will raise as much as 120.1 billion yen ($1.2 billion) selling shares to help pay for the deal.
The MSCI Asia Pacific excluding Japan Index advanced 1 percent to 424.88 as of 6:19 p.m. in Hong Kong, as all 10 industry groups on the gauge climbed. Global stocks have slumped since May 20 after Federal Reserve Chairman Ben S. Bernanke said the central bank may reduce bond purchases if the U.S. economy improves in line with forecasts.
“Equities are still attractive,” David Cassidy, the Sydney-based head of equity strategy at UBS AG, said by e-mail. “While global economic growth is traveling below long-run trends, it is still positive and corporate earnings are still growing at a moderate pace. Ultimately a move to taper quantitative easing because of ongoing good news in relation to U.S. growth shouldn’t worry equities.”
The MSCI Asia Pacific Index, which includes Japanese companies, climbed 0.4 percent. The gauge is down 9.5 percent since May 20 amid concern that the Fed will begin tapering stimulus as China’s economy slows and Japan puts off unveiling economic reform policies until after upper house elections later this month.
Japan’s Topix index slid 0.3 percent, with volume 34 percent below its 30-day average for the time of day. South Korea’s Kospi index gained 0.8 percent and Australia’s S&P/ASX 200 Index (AS51) climbed 1.1 percent. New Zealand’s NZX 50 Index gained 0.2 percent. Singapore’s Straits Times Index added 0.6 percent and Taiwan’s Taiex Index fell 0.2 percent.
Hong Kong’s Hang Seng Index gained 1.6 percent with trading volume 36 percent below the 30-day average. China’s Shanghai Composite Index climbed 0.6 percent.
Chinese Premier Li Keqiang said fiscal funds should be used to redevelop shantytowns and improve basic infrastructure as part of efforts to stabilize the world’s second-largest economy. Money should also be used to focus the economy more on domestic consumption, the State Council, or Cabinet, said in a statement on its website yesterday, after a meeting led by Li.
The MSCI Asia Pacific Index, which includes Japan, traded at 12.7 times average estimated earnings yesterday, compared with 14.7 for the S&P 500 and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the Standard & Poor’s 500 Index (SPX) added 0.3 percent. The S&P 500 rose 0.1 percent yesterday as exchanges closed at 1 p.m. in New York. U.S. equities markets are shut today for the Independence Day holiday.
Asian-based companies exporting to the U.S. advanced. CSL gained 3.5 percent to A$63.38 in Sydney. Samsung Electronics Co., which gets 22 percent of sales in America, added 1.2 percent to 1.317 million won in Seoul.
U.S. jobless claims decreased to 343,000 in the week ended June 29 from a revised 348,000 in the prior period that was higher than initially reported, the Labor Department said yesterday in Washington. Separate reports showed companies boosted employment by 188,000 workers in June, while service industries unexpectedly expanded at the slowest pace in more than three years.
The data came before the government’s monthly labor report on July 5 that will probably show U.S. employers created 165,000 jobs in June, after adding 175,000 a month earlier, according to the median forecast of economists in a Bloomberg survey. The unemployment rate probably fell to 7.5 percent, matching April’s four-year low.
“Definitely the next move will be up” for our equity weighting, Peter Elston, Singapore-based head of Asia-Pacific strategy and asset allocation at Aberdeen Asset Management Plc, told Bloomberg TV. “It’s just a question of when and it’s probably getting quite close.”
Energy producers advanced as crude oil prices rallied after the ousting of Egypt’s president fanned concern unrest will disrupt Middle East oil supply. Cnooc gained 2.1 percent to HK$12.80 in Hong Kong. China Petroleum & Chemical Corp., the nation’s largest refiner, rose 2.5 percent to HK$5.25. Woodside Petroleum Ltd. (WPL), Australia’s No. 2 energy producer, added 3 percent to A$35.64.
West Texas Intermediate crude for August delivery traded at $101.02 a barrel, near a 14-month high, in electronic trading on the New York Mercantile Exchange at 5:56 p.m. in Sydney.
Dentsu sank 9.2 percent to 3,155 yen as the company said it will offer as many as 29 million shares it owns and 8 million new shares to investors in Japan and overseas. The proceeds will be used to repay part of its 200 billion yen short-term debt from the acquisition that was completed in March, it said.
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