Australian stocks and Japanese equity futures rose after better-than-estimated U.S. home sales added to confidence in the global recovery, boosting the outlook for exporters and companies with profit tied to economic growth.
Treasury Wine Estates Ltd. advanced 1.4 percent as Australia’s largest winemaker posted first-half profit that beat analyst estimates. American Depositary Receipts of Komatsu Ltd., the world’s second biggest maker of bulldozers and dump trucks, gained 2.5 percent. ADRs of Nissan Motor Co., the carmaker that gets 80 percent of sales outside of Japan, rose 1.7 percent.
Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 11,445 in Chicago yesterday, up from 11,390 at the close in Osaka, Japan. They were bid in the pre-market at 11,430 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index advanced 0.9 percent, extending this month’s rally to 4.2 percent. New Zealand’s NZX 50 Index rose 0.4 percent.
“There’s a dawning realization from many people that they are not being aggressive enough with their exposure to equities,” said Glenn Morgan, head of Australian equity sales at Deutsche Bank AG in Sydney. “The macro backdrop is still looking better and companies are delivering. There’s a weight of money sitting in cash, out of the market.”
Futures on the Standard & Poor’s 500 Index were little changed. The S&P 500 gained 1.3 percent yesterday and the Dow Jones Industrial Average advanced to the highest level in five years as better-than-estimated housing data bolstered economic optimism and European shares rebounded amid gains in Italian bonds. Orders for U.S. durable goods excluding transportation equipment climbed in January by the most in a year, indicating business investment is holding up.
Japan’s Trade Ministry is scheduled to report industrial production data for January at 8:50 a.m. Tokyo time. Industrial production is forecast to increase 1.5 percent last month, according to the median estimate of 27 economists surveyed by Bloomberg.
Japan’s Nikkei 225 Stock Average is poised to rebound from the biggest two-day drop since November 2011. The gauge has surged 26 percent since the end of October amid optimism new Prime Minister Shinzo Abe and the central bank will lead the country out of deflation. The measure rose 1 percent this month, following a 7.2 percent surge in January.
The MSCI Asia Pacific Index, the benchmark regional equities gauge, yesterday traded at 14.7 times average estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. climbed 0.8 percent to 93.80 in New York yesterday.