Asian stocks rose this week, with the regional benchmark index capping its 12th week of advance in 13 weeks, as positive economic reports from the U.S. boosted the outlook for the region’s exporters.
Toyota Motor Corp., Japan’s No. 1 carmaker, climbed 4.7 percent as the yen weakened against the U.S. dollar. Li & Fung Ltd., a supplier of clothes and toys to Wal-Mart Stores Inc., advanced 7.6 percent as U.S. retail sales, consumer confidence and employment reports exceeded economists’ estimates. China Railway Construction Corp. dropped 8.9 percent after a section of a high-speed track it built collapsed in central China’s Hubei province following heavy rains.
“The U.S. still seems to be slowly but surely improving, and that’s definitely improving the mood of investors,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Perhaps we are seeing a sustained devaluation of the yen, which would improve the outlook for Japanese exporters.”
The MSCI Asia Pacific Index rose 0.8 percent to 127.95 this week. The measure, which has retreated for just one week since Dec. 16, entered a bull market on Feb. 29, gaining more than 20 percent from an Oct. 5 low, after U.S. economic optimism and monetary easing in Europe, Japan and China fueled the fastest rally in more than two years.
Stocks in the Asian benchmark were valued at 16.8 times estimated earnings on average, the highest level since May 2010, according to data compiled by Bloomberg. That compares with 14.5 times for the S&P 500 and 14.6 times for the Stoxx Europe 600 Index.
Wen on Property
The Shanghai Composite Index fell 1.4 percent as real estate companies tumbled after China’s Premier Wen Jiabao said property prices are still too high in his concluding speech to the National People’s Congress in Beijing.
Hong Kong’s Hang Seng Index advanced 1.1 percent. The Hang Seng China Enterprises Index of mainland companies declined 0.4 percent. South Korea’s Kospi Index increased 0.8 percent and Australia’s S&P/ASX 200 Index climbed 1.5 percent
Japan’s Nikkei 225 Stock Average gained 1.6 percent this week, extending its rally this year as a weaker yen boosted the outlook for exporters. The gauge is 1.2 percent away from recouping its losses since a magnitude-9 earthquake and tsunami on March 11, 2011, left more than 19,000 people dead and missing and triggered the worst nuclear crisis in 25 years.
The yen has retreated 7.8 percent this year as the strengthening recovery in the U.S. and signs that Europe may be able to prevent its debt crisis from worsening reduced demand for the currency as a safe haven.
Toyota Motor Corp., Asia’s biggest carmaker by market value, gained 4.7 percent to 3,580 yen. Hotai Motor Co., a Taiwanese importer of Toyota vehicles and parts, soared 17 percent to NT$251, its highest since listing in 1997, on lower costs from the weaker yen. Hotai was added to the FTSE TWSE Taiwan 50 Index after the close of business on March 16.
Hitachi Ltd., an electronic equipment maker that gets almost half its revenue outside Japan, rose 5.5 percent to 501 yen as it forecast record full-year net income on better-than-expected proceeds from selling its hard-disk drive unit. Canon Inc., the camera maker, advanced 5.6 percent.
The Asia-Pacific gauge rose 12.4 percent this year through March 16 amid growing confidence in the U.S. economy, Europe’s efforts to tackle its sovereign debt crisis and speculation China will further ease monetary policy.
Exporters gained as U.S. applications for unemployment insurance payments fell by 14,000 to 351,000 in the period ended March 10, Labor Department figures showed March 15. The Bloomberg Consumer Comfort Index rose to minus 33.7 from minus 36.7 in the week ended March 11.
The confidence report’s measure of the buying climate reached the highest level since November 2007, and a gauge of the state of the economy had its best showing since September 2008.
Li & Fung climbed 7.6 percent to HK$19.10 this week in Hong Kong. James Hardie Industries SE, an Australian seller of home siding to the U.S., advanced 2.2 percent in Sydney.
Neptune Orient Lines Ltd., parent of Southeast Asia’s largest container line, climbed 3.6 percent in Singapore on the improved outlook for consumption and as oil prices declined through the week. Chinese port operator China Merchants Holdings International Co. advanced 3 percent to HK$27.60 in Hong Kong.
China’s developers slid after Wen said at a March 14 press conference in Beijing that the country must not slacken efforts in regulating the housing sector and relaxing curbs could cause “chaos” in the market. A burst property bubble would hurt the entire economy, and the government wants “long-term steady and sound growth” in housing, he said.
Country Garden Holdings Co., a builder controlled by China’s second-richest woman, dropped 3.6 percent to HK$3.16 in Hong Kong. China Resources Land Ltd., a state-controlled developer listed in Hong Kong, slid 7.2 percent to HK$12.82. China Vanke Co., the country’s biggest listed developer retreated 3.8 percent to 8.27 yuan in the southern city of Shenzhen.
China Railway Construction dropped 8.9 percent to HK$5.22 after the collapse renewed safety concerns prompted by a fatal crash last year. CSR Corp., a train maker, retreated 5.8 percent to HK$5.32 and China Railway Group Ltd., an infrastructure builder, slipped 7.4 percent to HK$2.77.