Asian stocks outside Japan rose as Chinese property developers and resources companies climbed. Japanese shares fell after economic growth in the world’s third-largest economy slowed more than forecast.
Raw-materials suppliers paced gains on the regional equities index. BHP Billiton Ltd., the world’s biggest miner, jumped 2.4 percent in Sydney. China Resources Land Ltd., the second-largest mainland developer traded in Hong Kong, rose 2.3 percent amid speculation the government will relax a ban on companies raising funds through share sales. Bridgestone Corp., Japan’s No. 1 tiremaker, advanced 2.8 percent after raising its full-year profit forecast.
The MSCI Asia Pacific excluding Japan Index advanced 0.8 percent to 443.98 as of 6:30 p.m. in Tokyo. Eight out of 10 groups on the gauge rose, with more than two stocks climbing for each that dropped. China’s Shanghai Composite Index, now with the cheapest valuation of the world’s top 10 stock markets, added 2.4 percent to close at its highest since June 19.
“The rest of the year will be better for the Chinese market because expectations got so low,” Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which oversees about $207 billion, said by telephone. “That’s why we’re still overweight on Chinese equities and valuations are among the cheapest. With expectations so low, it’s quite easy for the market to outperform.”
Hong Kong’s Hang Seng Index climbed 2.1 percent, closing at its highest level since June 4. The Hang Seng retreated 3.8 percent this year through last week, the only decline among developed markets tracked by Bloomberg, amid concern China’s economic growth is slowing and speculation the Federal Reserve will pare U.S. bond purchases.
Trading volume on the Shanghai Composite Index was 43 percent higher than its 30-day average. The index is valued at 8.5 times 12-month projected earnings, compared with the five-year average of 12.7 times, data compiled by Bloomberg shows. That is the lowest among the world’s 10 leading stock markets. The index slumped 9.6 percent this year through Aug. 9.
Investors are “increasingly willing to acknowledge China stocks’ inexpensive valuations as the country’s macro environment stops deteriorating,” Michael Kurtz, head of global equity strategy at Nomura Holdings Inc., wrote in an e-mail.
Japan’s Topix index fell 0.6 percent. Japan’s economy expanded an annualized 2.6 percent in the second quarter, slowing from a revised 3.8 percent in the previous three months. The median forecast of economists surveyed by Bloomberg News was for 3.6 percent growth.
Japan’s top-listed companies doubled earnings last quarter from a year earlier, with profit rising 103 percent and beating analysts’ estimates by 16 percent, the most in two years, data compiled by Bloomberg show. Companies topping estimates range from Toyota and Sony Corp. to Shiseido Co. and Kobe Steel Ltd.
Even after falling for the past three months, the Topix is still up 32 percent this year, retaining Japan’s position as the world’s best-performing developed equity market. The measure has risen amid optimism Prime Minister Shinzo Abe will push through reforms while the Bank of Japan provides record stimulus in a bid to ignite a recovery in Asia’s second-largest economy.
“I’m relatively cautious on the stock market,” Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, told Bloomberg TV. “Next year there is a chance that Japan goes into a recession, and the financial markets usually see that half a year in advance. I would expect the stock market to be peaking now.”
South Korea’s Kospi index today advanced 0.2 percent. Australia’s S&P/ASX 200 Index climbed 1.1 percent, while New Zealand’s NZX 50 Index fell 0.3 percent. Singapore’s Straits Times Index gained 0.1 percent, and Taiwan’s Taiex Index rose 0.6 percent.
Futures on the Standard & Poor’s 500 Index slid 0.6 percent. The U.S. benchmark gauge dropped 0.4 percent in New York on Aug. 9 after investors pulled money from exchange-traded funds and as signs of economic recovery added to concern the Fed will cut stimulus this year.
The MSCI Asia Pacific Index, the regional benchmark gauge that includes Japanese shares, last week declined 1.3 percent, snapping the longest streak of weekly gains since January. About 50 percent of member companies that have posted profits this earnings season beat analysts’ estimates, data compiled by Bloomberg show.
That left the benchmark regional equities gauge trading at 12.9 times estimated earnings through the end of last week, compared with 15.3 for the Standard & Poor’s 500 Index and 13.9 times for the Stoxx Europe 600 Index.
Raw-material and energy shares paced gains across the Asia-Pacific region. BHP Billiton added 2.4 percent to A$36.81, while and Rio Tinto Group rose 2.6 percent to A$61.83 in Sydney. Jiangxi Copper Co., China’s biggest producer of the metal, jumped 7 percent to HK$15.22 in Hong Kong.
Bridgestone gained 2.8 percent to 3,445 yen in Tokyo. The tiremaker raised its net-income forecast for the full year to 246 billion yen ($2.5 billion) from 235 billion.
Citizen Holdings Co. surged 17 percent to 640 yen, the most in 37 years, after the watchmaker boosted its net-income outlook.
Chinese developers climbed amid speculation the government will relax a ban on companies raising funds through share sales. China Resources Land rose 2.3 percent to HK$22.60. Evergrande Real Estate Group Ltd. added 2.5 percent to HK$3.25.