Asian Stocks Advance on Earnings Optimism; Hitachi Jumps

Asian stocks rose, with the regional benchmark index erasing losses, as earnings at companies from Hitachi Ltd. to LG Household (051900) & Health Care Ltd. beat estimates.

Hitachi, a maker of electronic equipment, jumped 8.4 percent in Tokyo. LG Household climbed 6.2 percent in Seoul. Nine Dragons Paper Holdings Ltd. (2689) advanced 6.7 percent in Hong Kong after Deutsche Bank AG raised its equity rating on the maker of packaging materials. Agricultural Bank of China Ltd. paced declines among mainland lenders after the country’s money-market rates surged.

The MSCI Asia Pacific Index rose 0.2 percent to 142.97 as of 5:25 p.m. in Tokyo, erasing losses of as much as 0.5 percent. About five shares gained for every four that fell on the the measure, which yesterday snapped a four-day advance. The gauge climbed to a five-month high on Oct. 22 amid speculation the Federal Reserve will delay tapering stimulus.

“For the time being, until we get an earnings shock, people are probably quite happy to support equity markets globally,” Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by telephone. “We’ll continue to see stimulatory policies from the Fed. Chinese interest rates are a concern but it looks manageable at this stage.”

Australia’s S&P/ASX 200 Index rose 0.3 percent. Japan’s Topix index rose 0.6 percent, erasing losses of as much as 0.8 percent. South Korea’s Kospi index added 0.5 percent. Taiwan’s Taiex index climbed 0.2 percent, and Singapore’s Straits Times Index gained 0.3 percent.

India’s S&P BSE Sensex index was little changed, erasing gains of as much as 1.3 percent earlier when it briefly touched an all-time closing high. New Zealand’s NZX 50 Index fell 0.9 percent, also retreating from a record high. Hong Kong’s Hang Seng Index slipped 0.7 percent.

China Rates

China’s Shanghai Composite Index slid 0.9 percent after the benchmark money-market rate jumped the most in two months. The nation’s central bank refrained from injecting cash in open-market operations for the third auction in a row amid signs of a pickup in Asia’s biggest economy.

The country’s manufacturing strengthened more than anticipated this month, data showed today. The HSBC Holdings Plc and Markit Economics preliminary purchasing managers’ index of manufacturing activity increased to 50.9 this month from 50.2 in September. That compares with the median estimate of 50.4 in a Bloomberg survey of economists.

The MSCI Asia Pacific Index climbed 3 percent this month through yesterday after U.S. lawmakers ended the government shutdown and raised the debt ceiling. The gauge traded at 13.7 times estimated earnings, compared with 15.8 for the S&P 500 and 14.7 for the Stoxx Europe 600 Index.

U.S. Futures

Standard & Poor’s 500 futures gained 0.3 percent today. The U.S. equity gauge fell 0.5 percent yesterday, snapping a five-day rally, as forecasts at companies from Caterpillar Inc. to Broadcom Corp. disappointed investors.

Hitachi jumped 8.4 percent to 659 yen, the biggest jump since March 2011 after reporting preliminary net income of 32 billion yen above its forecast of 15 billion yen. Sales and operating profit also exceeded expectations. The company is scheduled to report final results on Oct. 29.

Panasonic Corp. (6752), Japan’s second-largest television maker, added 1.5 percent to 936 yen after the Nikkei newspaper reported it will halve its chip-making workforce to about 7,000 by fiscal 2014 and plans to sell some plants.

Wing Hang Bank Ltd. rose 2.5 percent to HK$117.10. Oversea-Chinese Banking Corp., Southeast Asia’s second-largest lender, is considering a bid for the Hong Kong lender, said people familiar with the matter.

LG Household climbed 6.2 percent to 545,000 won in Seoul after the maker of cleaning and personal care products reported third-quarter net income surged 30 percent to 114.1 billion won from a year earlier. The compares with the average of 102.3 billion won by 13 analyst estimates, according to a Bloomberg survey.

Nine Dragons

Nine Dragons surged 6.7 percent to HK$6.02 in Hong Kong. Deutsche Bank raised its rating on the stock to hold from sell, saying rising capacity utilization may boost 2014 earnings.

Chinese lenders and developers declined. Agricultural Bank of China fell 1.4 percent to HK$3.53. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, slipped 1.3 percent to HK$5.21. China Overseas Land & Investment Ltd., the biggest mainland real estate company traded in Hong Kong, dropped 2.1 percent to HK$23.15. Country Garden Holdings Co., controlled by billionaire Yang Huiyan, sank 5.4 percent to HK$5.06.

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

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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