Asian stocks rose, with the regional benchmark equities gauge on course to halt a two-day drop, as Japan’s Topix index closed at its highest level in nearly two months after the yen weakened and Citigroup Inc. earnings beat estimates.
Indian stocks tumbled after the central bank raised interest rates. Canon Inc. (7751), a Japanese camera maker that gets 27 percent of its sales in the Americas, gained 2.7 percent. GCL-Poly Energy Holdings Ltd. (3800), which produces solar-grade polysilicon, jumped 6.7 percent in Hong Kong after China’s State Council issued a plan to boost the solar industry. Paladin Energy Ltd. (PDN) soared 7.3 percent in Sydney after reporting record uranium output.
The MSCI Asia Pacific Index rose 0.6 percent to 135.69 as of 7:05 p.m. in Tokyo, with all 10 industry groups on the gauge increasing.
“Asian and emerging equity markets are positioned for a very good tactical rebound,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages more than $130 billion. “We started the quarter with the earnings expectation for the June quarter at around 5.5 percent and came all the way down to 2.4 percent. Chances are final results will be better than that.”
The MSCI Asia Pacific Index gained 4.3 percent this year through yesterday and traded at 13.2 times estimated earnings. That compares with 15.2 times for the Standard & Poor’s 500 Index and 13.3 times for the Stoxx Europe 600 Index.
Utilities gained the most among the regional gauge’s industry groups. Tokyo Electric Power Co. (9501), Japan’s biggest utility by generation capacity, surged 13 percent to 768 yen.
India’s S&P BSE Sensex index slid as much as 1.9 percent, at one point heading for the biggest loss in almost a month. Japan’s Topix rose 0.7 percent, the highest close since May 22, after the market reopened following a public holiday. The Tokyo Stock Exchange became the world’s third-biggest bourse by listed companies today, adding 1,100 stocks from the Osaka Securities Exchange as the two merged their cash-equity trading platforms.
South Korea’s Kospi index fell 0.5 percent. Australia’s S&P/ASX 200 Index rose 0.1 percent, while New Zealand’s NZX 50 Index lost 0.6 percent.
Hong Kong’s Hang Seng Index (HSI) added less than 0.1 percent. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 0.3 percent. Taiwan’s Taiex Index rose 0.1 percent and Singapore’s Straits Times Index slid 0.4 percent.
Futures on the S&P 500 were little changed. The gauge gained 0.1 percent in New York yesterday. Citigroup, the third-biggest U.S. bank by assets, posted adjusted earnings of $1.25 a share for the second quarter, beating the $1.18 average estimate of 27 analysts surveyed by Bloomberg News.
Japanese exporters gained, with the yen trading at 99.85 per dollar as of 3:44 p.m. in Tokyo. Canon added 2.7 percent to 3,460 yen. Mazda Motor Corp. (7261), an automaker that gets 30 percent of its sales in North America, advanced 1.4 percent to 442 yen.
Indian shares fell after the Reserve Bank of India hiked rates. The central bank increased the marginal standing facility and the bank rate to 10.25 percent from 8.25 percent, and said it plans to sell $2 billion of government bonds on July 18, moves that worsen a tightening in liquidity across most of the biggest emerging markets. State Bank of India tumbled 4.1 percent to 1,833 rupees.
The tightening “will be negative for the equity markets in the near-term as the market was looking for easy monetary policy going forward,” Hemant Kanawala, head of equities at Kotak Mahindra Old Mutual Life Insurance Ltd., which has $2 billion in assets, told Bloomberg TV India today.
Solar stocks gained after China’s State Council said the world’s biggest maker of solar panels plans to add 10 gigawatts of solar power a year during the next three years. The plan would increase the nation’s solar installed capacity fivefold to more than 35 gigawatts by 2015.
GCL-Poly Energy advanced 6.7 percent to HK$1.92 in Hong Kong. China Singyes Solar Technologies Holdings Ltd. (750), a panel producer, added 4.4 percent to HK$8.77.
Paladin Energy soared 7.3 percent to A$1.03 in Sydney, the biggest gain since July 1. The uranium explorer reported annual record production, up 20 percent from full-year 2012.
NetDragon Websoft Inc. (777) posted a record decline, slumping 21 percent to HK$19.04 in Hong Kong. The online-game developer said it plans to sell app store 91 Wireless Websoft Ltd. for $1.1 billion to Baidu Inc., operator of China’s biggest search engine. The buyer is seeking a greater share of the mobile market.
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