Asian Stocks Head for Four-Day Gain on Fed Rate Optimism

Asian stocks rose, with the regional benchmark index gaining for a fourth day, as investors weighed earnings and the likely timing of Federal Reserve interest-rate increases.

NCsoft Corp., a maker of online games, advanced 7.6 percent in Seoul after reporting quarterly profit rose. Crown Resorts Ltd. soared 5.6 percent after the Australian casino company posted a 66 percent increase in full-year net income. Telstra Corp., Australia’s largest phone company, added 2.2 percent after announcing a share buyback and posting annual profit above estimates. Aiful Corp. plummeted 16 percent as the Japanese consumer lender said quarterly profit sank 71 percent.

The MSCI Asia Pacific Index (MXAP) added 0.4 percent to 147.87 as of 7:18 p.m. in Hong Kong after rising 2.2 percent the past three days. All of the gauge’s 10 industry groups advanced today. A drop in China’s credit expansion yesterday added to speculation that policy makers will expand stimulus. In the U.S., a slowdown in retail sales fueled bets the Fed won’t raise rates earlier than expected.

“Even though the Fed is changing the way they talk about rates, we are still far away from seeing higher interest rates,” said Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about $1.5 billion. “As long as rates stay low, which could be still a couple of years, equities will remain well bid.”

Futures on the Standard & Poor’s 500 Index gained 0.1 percent today after the measure rose 0.7 percent yesterday. Retail sales were little changed in July, the worst performance in six months, as demand for cars slowed and tepid wage growth restrained U.S. consumers. The slowdown in purchases followed a 0.2 percent advance in June, the Commerce Department reported yesterday in Washington.

Regional Gauges

Fed Chair Janet Yellen has said officials will keep the central bank’s benchmark interest rate low for a “considerable time” after its bond buying ends.

Japan’s Topix (TPX) index rose 0.7 percent as the yen fell for a fourth day against the dollar. South Korea’s Kospi index was little changed as the nation’s central bank cut its key interest rate for the first time in more than a year. Australia’s S&P/ASX 200 Index advanced 0.6 percent, while New Zealand’s NZX 50 Index added 0.2 percent. Taiwan’s Taiex index was little changed and Singapore’s Straits Times Index fell 0.2 percent. India’s S&P BSE Sensex Index climbed 0.7 percent.

The Shanghai Composite Index fell 0.7 percent. Hong Kong’s benchmark Hang Seng Index slipped 0.4 percent after closing yesterday at the highest level since November 2010. The Hang Seng China Enterprises Index of mainland stocks traded in the city dropped 1.1 percent.

China Stimulus

Chinese stocks closed higher yesterday on speculation the government will take steps to support its 7.5 percent economic expansion goal, after initially falling when the People’s Bank of China reported the lowest level for its broad financing measure since 2008. Barclays Plc is forecasting two second-half interest-rate cuts, while Australia & New Zealand Banking Group Ltd. said a reduction in Chinese banks’ reserve requirements is imminent.

NCsoft soared 7.6 percent to 155,500 won in Seoul after net income in the second quarter jumped 59 percent to 54.3 billion won ($53 million) from a year earlier.

Crown Resorts climbed 5.6 percent to A$15.66 in Sydney after saying net income was A$655.8 million ($610 million) in the year ended June 30 as earnings from its Macau affiliate surged.

Share Buyback

Telstra rose 2.2 percent to A$5.56 after saying it will buy back A$1 billion of stock. Profit rose 14 percent to A$4.28 billion in the 12 months ended June, the Melbourne-based company said today. That beat the A$4.2 billion average of eight analyst estimates compiled by Bloomberg.

Aiful plummeted 16 percent to 447 yen in Tokyo after net income in the quarter ended June slumped 71 percent to 3.6 billion yen ($35 million) from a year earlier. Nomura Holdings Inc. cut the company’s price target to 240 yen from 300 yen.

Fairfax Media Ltd., a newspaper publisher, jumped 6.2 percent to 94 Australian cents after Chief Executive Officer Greg Hywood said in a conference call that the newspaper publisher’s decline in print advertising had moderated. Earlier, the company reported profit that beat estimates.

Tencent Holdings Ltd. lost 2.3 percent to HK$130.10 as Asia’s biggest Internet company was cut at HSBC Holdings Plc after posting results. Tencent expects growth in mobile-game revenue to plateau as it works to improve quality and expand titles at a business that generates more than half its sales.

Of the companies on the Asian stock gauge that released results from the start of July through yesterday and for which Bloomberg had estimates, 57 percent beat earnings expectations.

The Asia-Pacific gauge traded at 13.5 times estimated earnings as of yesterday compared with 16.3 for the S&P 500 and 15 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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