Asian Stocks Outside Japan Rise as Utility Shares Climb

Asian stocks outside Japan snapped two days of losses as utilities gained the most in two weeks. Shares in Tokyo declined as brokerages retreated.

Korea Electric Power Corp. (015760) climbed 4.8 percent in Seoul. Nomura Holdings Inc., Japan’s biggest securities company, fell 3.2 percent. Syrah Resources Ltd. soared 28 percent to a record in Sydney following a report Glencore Plc has made a takeover approach for the Melbourne-based miner.

The MSCI Asia Pacific Excluding Japan Index added 0.2 percent to 498.44 as of 6:45 p.m. in Hong Kong, as six of the 10 industry groups advanced. China’s trade balance surplus shrank to $31.6 billion in June, with exports and imports both rising less than economists’ forecasts, a report today showed.

“It’s still consistent with a stabilization in Chinese growth, albeit not quite as strong as one would have liked to have seen,” Shane Oliver, a Sydney-based global strategist at AMP Capital Investors Ltd., which oversees about $131 billion, said by phone. “The bear case on China has been way overstated and this data would support the view that growth is stabilizing not collapsing.”

Japan’s Topix index slipped 0.9 percent after a report showed machine orders unexpectedly fell by a record 19.5 percent in May from the month before. Economists surveyed by Bloomberg forecast a 0.7 percent gain. Brokerages slid, with Nomura dropping 3.2 percent to 676 yen.

South Korea’s Kospi index added 0.1 percent after the central bank kept its key interest rate unchanged. Australia’s S&P/ASX 200 Index rose 0.2 percent after a report showed payrolls increased by 15,900 in June, beating estimates. New Zealand’s NZX 50 Index gained 0.1 percent. Singapore’s Straits Times Index slid 0.2 percent, while Taiwan’s Taiex index rose 0.8 percent. India’s BSE S&P Sensex fell for a third day, losing 0.3 percent.

Regional Indexes

Hong Kong’s Hang Seng Index advanced 0.3 percent, as did the Hang Seng China Enterprises Index (HSCEI) of mainland stocks traded in the city. The Shanghai Composite Index was little changed after rising as much as 0.3 percent.

China’s overseas shipments expanded 7.2 percent last month, missing the 10.4 percent growth forecast by economists surveyed by Bloomberg. Imports rose 5.5 percent, less than the 6 percent estimate. Data yesterday showed producer prices fell last month at the slowest pace in more than two years.

“Investors are disappointed as they were expecting better trade numbers,” said Mari Oshidari, a Hong Kong-based strategist at Okasan Securities Group Inc. “Cautiousness towards China’s economy has receded overall, with the government showing signs it will step in to support growth when needed.”

Utility Rally

Utilities rose most among the regional benchmark’s industry groups. Korea Electric surged 4.8 percent to 38,550 won after its chief executive officer said he expects higher profit. China Resources Power Holdings Co. jumped 3.2 percent to HK$22.90 on a report the government is planning to encourage private investment in the power-distribution sector.

The Jakarta Composite Index (JCI) added 1.5 percent to a one-year high. Presidential candidate Joko Widodo said unofficial counts showed him winning yesterday’s national election. Widodo, who is known for cutting red tape and boosting investment as governor of Jakarta, had a five percentage point lead, according to two survey companies that declared him the winner, a projection disputed by opponent Prabowo Subianto.

U.S. Futures

Futures on the Standard & Poor’s 500 Index slipped 0.9 percent today. The gauge rose 0.5 percent yesterday as optimism over corporate earnings overshadowed central bank concerns that investors may be growing too complacent about the U.S. economic outlook.

Fed officials said that monetary policy needed to continue to promote the favorable financial conditions required to support the economic expansion, according to the minutes of the June 17-18 Federal Open Market Committee meeting released yesterday.

Policy makers are debating the timing for the first increase in the main interest rate since 2006. Recent data from employment to housing is indicating the world’s largest economy is recovering after the worst contraction in gross domestic product since 2009, fueling speculation the Fed may begin raising rates sooner than estimated.

The Fed meeting took place before a June payrolls report that showed job growth beat expectations and the unemployment rate fell to the lowest level since before the financial crisis peaked six years ago.

Syrah surged 28 percent to a record A$5.49 in Sydney. Glencore, the mining company run by billionaire Ivan Glasenberg, may be willing to pay as much as A$2 billion ($1.9 billion) for Melbourne-based Syrah, the Australian Financial Review reported today, without saying where it got the information. Syrah said it has received informal inquiries, without naming any companies.

BYD Co., an electric-car maker, rose 3.1 percent to HK$46.55 in Hong Kong after China yesterday said it will exempt new-energy vehicles from sales taxes to curb pollution.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net John McCluskey, Jim Powell

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