Stocks in Asia Rise for Second Week as Jobs Reports Fuel Growth Optimism
Asian stocks rose for a second consecutive week as employment reports in the U.S. and Australia spurred optimism global growth will regain traction.
Canon Inc., which gets more than a quarter of its sales from the Americas, gained 5.6 percent in Tokyo and Toyota Motor Corp., the world’s largest automaker, rose 1.4 percent. National Australia Bank Ltd. rallied 2.4 percent in Sydney on speculation it won’t need to raise capital to finance a takeover. SM Prime Holdings Inc., the Philippines’ biggest shopping mall operator, jumped 9.5 percent as export growth boosted optimism in the nation’s economy.
“The question you should ask yourselves is what could go right from here, rather than what could go wrong,” said Paul Xiradis, who manages about $10 billion as chief executive officer of Ausbil Dexia Ltd. in Sydney. “We could see a big swing-around back into some riskier assets, and, given the positioning of the market, it could be quite powerful.”
The MSCI Asia Pacific Index increased 1.5 percent to 121.8 in the past five days, extending last week’s 2.7 percent gain, which was spurred by reports that showed growth in U.S. and Chinese manufacturing. The gauge has climbed 0.25 percent from a one-month low on Aug. 25 on optimism the U.S. economy will avoid slipping back into recession.
Hong Kong’s Hang Seng Index rose 1.4 percent in the week, the Shanghai Composite Index added 0.3 percent and South Korea’s Kospi Index climbed 1.3 percent. Australia’s S&P/ASX 200 Index advanced 0.4 percent as Prime Minister Julia Gillard won support from independent lawmakers to form a government following the closest national election in 70 years.
Japan’s Nikkei 225 Stock Average rose 1.4 percent. A Cabinet Office report on Sept. 10 showed gross domestic product grew at an annualized 1.5 percent rate in the three months ended June 30, faster than the 0.4 percent reported last month.
A U.S. government report on Sept. 3 showed private payrolls climbed by 67,000 in August, more than the median forecast in a Bloomberg economist survey. A separate report on Sept. 9 showed weekly initial claims for unemployment benefits dropped to the lowest since July 9.
Canon climbed 5.6 percent to 3,750 yen, while Toyota gained 1.4 percent to 2,951 yen. Elpida Memory Inc., the world’s third- biggest maker of computer-memory chips, jumped 3.6 percent to 983 yen as Mitsubishi UFJ Morgan Stanley Securities Co. rated the stock “strong outperform” in new coverage.
James Hardie Industries SE, the biggest seller of home siding in the U.S., rose 7.4 percent to A$5.79 in Sydney.
“The jobs data put the brakes on pessimism that the global economy is moving into a recession,” said Yoji Takeda, who helps manage about $1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. “The market’s mood is improving. Some investors are becoming more bullish.”
In Sydney, National Australia Bank rose 2.4 percent to A$24.67. Its proposed A$13.3 billion ($12.3 billion) takeover of asset manager Axa Asia Pacific Holdings Ltd. was blocked a second time by antitrust regulators, which said concessions by the lender didn’t go far enough to gain approval. Axa Asia shares tumbled 11 percent to A$5.10.
Australian stocks advanced this week as the country’s statistics bureau said employers added 30,900 more workers in August from July. The median estimate of economists surveyed by Bloomberg News was for an increase of 25,000. The jobless rate fell to 5.1 percent from 5.3 percent.
Harvey Norman Holdings Ltd., Australia’s largest furniture and electrical retailer, climbed 5.3 percent to A$3.76. JB Hi-Fi Ltd., an electronics retailer, advanced 1.3 percent to A$21.70.
“The Australian employment numbers reinforce the message that the economy continues to do extraordinarily well compared to most other countries,” said Stephen Halmarick, who helps manage about $135 billion as head of investment markets research at Colonial First State Global Asset Management in Sydney. “Some of the extreme bearishness of the past few weeks has been flowing out.”
Stocks also rose this week on evidence the appetite for European sovereign debt is improving, easing concern the region will drag down global economic growth. A Portuguese sale of bonds due in 2021 drew bids for 2.6 times the amount offered, while a Polish auction of five-year debt attracted the strongest demand since 2008.
The MSCI Asia Pacific Index has slumped 5.7 percent from this year’s April 15 high amid concerns over Europe’s debt crisis, a faltering U.S. economy, and China’s steps to curb property-price inflation. The declines have cut the average price of shares in the gauge to 13.86 times estimated earnings, which remains higher than the S&P 500 Index’s 13.31 times.
Asian steelmakers advanced this week after U.S. President Barack Obama proposed a $50 billion spending plan and Chinese steel prices jumped. Posco, the world’s No. 3 steelmaker, rose 4.8 percent to 498,500 won in Seoul as Obama called for a program to fix roads, railways and runways, and after benchmark hot-rolled coil prices in China rose as producers in Hebei province shut mills.
BlueScope Steel Ltd., Australia’s largest steelmaker, advanced 5.4 percent to A$2.36 in Sydney. Maanshan Iron & Steel Co., China’s second-biggest Hong Kong-traded steelmaker, climbed 13 percent to HK$4.69 in Hong Kong.
In Manila, SM Prime climbed 9.5 percent to 12.26 pesos on expectations faster economic growth will sustain corporate earnings. Ayala Land Inc., the country’s largest builder, surged 11 percent to 18.70 pesos. Philippine exports increased 35.9 percent from a year earlier in July, the country’s statistics office reported.
“The market, especially foreign equity investors, has not appreciated the country’s reduced risk profile,” JPMorgan Chase & Co. analysts led by Gilbert Lopez wrote in a report.