Asian stocks rose, with a regional benchmark index climbing the most in a week, on stronger U.S. and Australian economic reports and speculation that slowing China trade boosts the case for easier monetary policy.
China Merchants Bank Co. led mainland lenders higher on speculation the government will take action to stimulate the economy amid slower exports. James Hardie Industries SE, an Australian supplier of building materials, climbed 3.1 percent after a report that construction permits increased. Honda Motor Co., which depends on North America for 44 percent of sales, advanced 1.4 percent in Tokyo.
The MSCI Asia Pacific Index rose 1.2 percent to 116.04 as of 7:38 p.m. in Tokyo, with almost three shares rising for each that fell. The gauge advanced 0.9 percent last week as manufacturing growth from China to the U.S. bolstered confidence in the global economy.
“There’s a sense of optimism that the U.S. economy has turned the corner,” said Andrew Pease, Sydney-based senior investment strategist for the Asia-Pacific region at Russell Investment Group, which oversees $137.6 billion. “Policy makers in Beijing are very much focused on downside risks. It would be a reasonable expectation that there’s a lot of monetary easing to come in the first half of the year.”
Futures on the Standard & Poor’s 500 Index rose 0.9 percent. The gauge gained 0.2 percent in New York overnight as investors awaited the start of the quarterly earnings season and German Chancellor Angela Merkel and French President Nicolas Sarkozy said they may complete budgetary rules for Europe as soon as this month.
“Europe’s bond yields are still high,” Russell Investment’s Pease said. “It’s going to be very hard for politicians in Europe to keep up with the pace at which the markets are going to move in the next few months.”
Japan’s Nikkei 225 Stock Average rose 0.4 percent, resuming trade after a three-day weekend. Australia’s S&P/ASX 200 Index increased 1.1 percent. South Korea’s Kospi Index climbed 1.5 percent. Hong Kong’s Hang Seng Index added 0.7 percent.
China’s Shanghai Composite Index jumped 2.7 percent, positing its biggest three-day advance since October 2010, amid speculation the People’s Bank of China will ease lending curbs as Europe’s debt crisis cuts demand for exports. Overseas shipments grew in December at the slowest pace in 10 months, the government said today.
Chinese lenders and developers advanced. China Merchants Bank jumped 2.7 percent to HK$16.54. Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market value, rose 1.9 percent to HK$4.93. China Overseas Land & Investment Ltd., the largest Chinese homebuilder listed in Hong Kong, gained 2.4 percent to HK$13.04.
Australian banks and makers of building-materials gained as the number of residential construction permits gained 8.4 percent in November from October, a sign of stronger demand for dwellings after the central bank lowered interest rates.
James Hardie climbed 3.1 percent to A$6.91. Boral Ltd., a supplier of concrete and timber, advanced 4.2 percent to A$3.72. Australia & New Zealand Banking Group Ltd. rose 1 percent to A$20.75.
Pacific Brands Ltd. surged 14 percent to 64 Australian cents. The Melbourne-based apparel maker said it had been approached about being acquired by KKR & Co., the private-equity firm run by Henry Kravis and George Roberts.
Exporters rose as consumer borrowing in the U.S. surged by the most in 10 years, indicating households are optimistic enough to take on debt and banks are more willing to lend.
Honda increased 1.4 percent to 2,488 yen. Hyundai Motor Co., South Korea’s largest automaker, advanced 2.3 percent to 226,500 won in Seoul. Samsung Electronics Co., the world’s second-biggest maker of mobile phones by sales, added 1 percent to 1.026 million won.
The MSCI Asia Pacific Index lost 17 percent in 2011 as China took steps to cool its property market and Europe struggled to resolve its debt crisis. The S&P 500 Index broke even for the year and the Stoxx Europe 600 Index dropped 11 percent. Stocks in the Asian gauge were valued at 12.1 times estimated earnings on average as of yesterday, compared with 12.2 times for the S&P 500 and 9.8 times for the Stoxx 600.
A gauge of Asian utilities fell 26 percent last year, dropping the most among the 10 industry groups on the regional gauge. Tokyo Electric Power Co. tumbled 91 percent amid nuclear meltdowns at its Fukushima Dai-Ichi plant.
Tepco, as the utility is known, surged 24 percent to 215 yen today, reversing earlier losses of as much as 12 percent, after the Nikkei newspaper reported Japan’s government may take a controlling stake in the company. The report may have reassured investors, said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
“It means it will avoid being delisted,” he said. “That’s creating a sense of safety and causing the stock to be bought back. Tepco will go bankrupt without government supervision.”
Olympus Corp. surged 20 percent to 1,263 yen after the Nikkei reported the scandal-hit camera maker will likely retain its listing on the Tokyo Stock Exchange and as the company took legal action against executives over a $1.7 billion accounting fraud.
“It’s looking much more likely Olympus will keep its listing now,” said Mitsuo Shimizu, an equity analyst at Cosmo Securities Co. “By suing, the company is making it clear who was responsible for hiding losses.”