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Asia Stocks Gain From Six-Year High Following U.S. Shares

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July 2 (Bloomberg) -- Asian stocks rose, with the regional index extending gains from a six-year high, after reports showing manufacturing expansion in the world’s two biggest economies sent U.S. equity gauges to records.

Innolux Corp., a Taiwanese maker of monitors, soared 6.6 percent, leading gains among information technology shares. Galaxy Entertainment Group Ltd., the gaming company controlled by billionaire Lui Che-woo, jumped 4.8 percent in Hong Kong as Bank of America Corp.’s Merrill Lynch unit said Macau casino revenue will rebound this month. Ryohin Keikaku Co., the retailer that owns the Muji brand, rose 4.5 percent in Tokyo after operating profit and sales topped estimates.

The MSCI Asia Pacific Index advanced 1 percent to 147.65 as of 6:07 p.m. in Hong Kong, climbing for a third day. More than two shares gained for each that fell.

“Economic conditions continue to look reasonably favorable and the U.S. continues to recover,” said Angus Gluskie, who helps oversee more than $550 million at White Funds Management in Sydney. “People view the market broadly favorably.”

Japan’s Topix index advanced 0.4 percent, taking its three-day gain to 2.2 percent. South Korea’s Kospi index climbed 0.8 percent. Australia’s S&P/ASX 200 Index increased 1.5 percent, while New Zealand’s NZX 50 Index added 0.1 percent. Taiwan’s Taiex index rose 0.5 percent, while Singapore’s Straits Times Index added 0.7 percent. India’s S&P BSE Sensex rose 1.3 percent.

Hong Kong’s Hang Seng Index advanced 1.6 percent with trading volume 36 percent above the 30-day average, as markets reopened after a holiday. Protesters took to Hong Kong streets yesterday for the biggest rally in a decade to demand full democracy and oppose Chinese control over elections.

China Stocks

The Hang Seng China Enterprises Index of mainland stocks traded in the city climbed 1.1 percent. The Shanghai Composite Index gained 0.4 percent. In its most recent pro-growth measures, China’s government announced June 30 changes to the way loan-to-deposit ratios are devised to give banks more lending capacity. The central bank last month cut the amount of funds required to be held in reserve.

Manufacturing in China expanded in June by the fastest pace this year, a purchasing managers’ index compiled by the government showed yesterday.

Futures on the Standard & Poor’s 500 Index advanced less than 0.1 percent today. The equity measure and the Dow Jones Industrial Average both climbed to all-time highs yesterday.

The Institute for Supply Management’s U.S. factory index was little changed at 55.3 in June from 55.4 in the prior month, a report showed yesterday. Readings above 50 indicate expansion. The median forecast of economists surveyed by Bloomberg called for 55.9.

U.S. Data

Other reports this week may give further clues on the strength of the U.S. economy. A private survey today may show U.S. employers hired more workers in June than in May. The official jobs data is due tomorrow, a day before the U.S. Independence Day holiday.

Information technology shares gained the most among the 10 industry groups on the MSCI Asia Pacific Index. Innolux soared 6.6 percent to NT$15.35 after Economic Daily News reported it plans to move part of its panel production lines from China to Taiwan and increase automation.

Galaxy Entertainment rose 4.8 percent to HK$65.00. Macau will return to gross gaming revenue growth in the second half, with a 2 percent gain in July expected from a year earlier, according to analysts led by Billy Ng at Merrill Lynch. Revenue dropped in June for the first time since 2009 amid competition from the World Cup for gamblers’ dollars. Sands China Ltd., the Macau casino operator controlled by billionaire Sheldon Adelson, gained 3 percent to HK$60.30.

Sumco Falls

Ryohin Keikaku jumped 4.5 percent to 12,130 yen after reporting revenue for the quarter through May surged 21 percent to 66.7 billion yen ($657 million) from a year earlier. Operating profit climbed 16 percent to 6.6 billion yen.

Among stocks that fell, Sumco Corp., a Japanese maker of silicon wafers, fell 3.9 percent to 929 yen after its rating was cut to reduce from neutral at Nomura Holdings Inc.

Goodman Fielder Ltd. lost 3.7 percent to 65.5 Australian cents after Wilmar International Ltd. and First Pacific Co. lowered their offer for Australia’s largest baker by about 3.6 percent. Wilmar added 1 percent to S$3.20, while First Pacific gained 3.4 percent to HK$8.95.

The Asia-Pacific gauge trades at 13.5 times estimated earnings, compared with 16.7 for the S&P 500 and 15.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Jim Powell

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