Asian Stocks Gain on Australian Rates, Earnings, S.Korea

Asian Stocks Rise as Commodity Prices Climb Ahead of RBA Meeting
A pedestrian walks past the Australian Securities Exchange headquarters in Sydney, Australia. Photographer: Sergio Dionisio/Bloomberg

Asian stocks rose, with a regional index heading for its longest winning streak in three months, as investors bet Australia’s central bank will cut interest rates tomorrow, corporate earnings beat estimates and confidence among South Korean manufacturers improved.

Australia & New Zealand Banking Group Ltd. advanced 1.1 percent on speculation the Reserve Bank of Australia will cut rates to bolster economic growth. BHP Billiton Ltd., the world’s biggest mining company, increased 1.9 percent in Sydney as copper futures gained. Samsung Heavy Industries Co. jumped 5.8 percent in Seoul after the nation’s No. 2 shipbuilder posted earnings that beat analysts’ estimates.

“In Australia, the consumer is really struggling,” Kumar Palghat, managing director and founder of Kapstream Capital Pty in Sydney, told Bloomberg Television. “I really think tomorrow the RBA should cut 50 basis points. That will be a meaningful number to kick-start the economy again.”

The MSCI Asia Pacific Excluding Japan Index climbed 1 percent to 441.53 as of 6:57 p.m. in Hong Kong, extending gains for a fifth day, the longest run of gains since Jan. 23. More than two shares rose for each that fell on the gauge. The regional index is heading for a 0.5 percent advance this month as earnings that beat analysts’ estimates from companies including Samsung Electronics Co. overshadowed concern Europe will struggle to contain its sovereign-debt crisis.

Australia’s S&P/ASX 200 Index increased 0.8 percent, the highest close since August. New Zealand’s NZX 50 Index rose 0.7 percent after the nation’s home-building approvals climbed to the highest in almost two years in March. Hong Kong’s Hang Seng Index gained 1.7 percent to its highest close since March 19.

Manufacturers’ Confidence

The Kospi Index added 0.3 percent after a report showed South Korean manufacturers’ confidence rose to the highest level in nine months. Markets in Japan, Vietnam and mainland China are closed for holidays.

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge advanced 0.2 percent in New York on April 27, capping its best weekly rally since March.

Australian banks advanced on speculation the RBA will lower its 4.25 percent cash-rate target at least 25 basis points tomorrow, with a 34 percent chance of a reduction to 3.75 percent, swaps data compiled by Bloomberg show. There’s a 68 percent chance it will be 3.5 percent or lower by July.

ANZ Bank climbed 1.1 percent to A$23.91 in Sydney. Commonwealth Bank of Australia, the nation’s biggest lender by market value, added 0.7 percent to A$51.97.

Miners Rally

Raw-material producers advanced as copper futures in London headed for a fifth day of gains. BHP increased 1.9 percent to A$35.55 in Sydney. Rio Tinto Group, the world’s third-biggest mining company, gained 1.4 percent to A$66.35. Jiangxi Copper Co., China’s No. 1 producer of the metal, rose 1.1 percent to HK$18.76 in Hong Kong.

Samsung Heavy jumped 5.8 percent to 41,700 won after posting first-quarter net income that exceeded analysts’ estimates by 56 percent. Bank of Communications Co. advanced 3.6 percent to HK$6 in Hong Kong after the Chinese lender reported first-quarter profit of 15.9 billion yuan ($2.5 billion), beating the average estimate of 15.4 billion yuan in a Bloomberg survey.

“The reporting season has been quite good,” said Tim Schroeders, who helps manage about $1 billion in equities at Pengana Capital Ltd. in Melbourne. “This is helping markets.”

Of the 234 companies on the regional index that posted quarterly profits since April 10, 93 surpassed expectations, while 107 fell short, according to data compiled by Bloomberg.

Among stocks that declined, Hon Hai Precision Industry Co., which assembles Apple Inc.’s iPhone and iPad, tumbled 7 percent to NT$92.40 in Taipei. The company slid after posting first-quarter profit that missed analysts’ estimates by 31 percent.

The MSCI Asia Pacific ex-Japan Index climbed 12 percent this year through last week, lifting the value of shares on the gauge to 11.9 times estimated earnings on average. That compares with 13.4 times for the S&P 500 and 10.8 times for the Stoxx Europe 600 Index.

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