Asia Stocks Advance as Won Strengthens; Crude Oil Erases Gain
Asian stocks rose, paced by banks and mining shares, and the won strengthened for the first time in four days after South Korea’s current-account surplus widened. Metals and grains climbed, while oil erased earlier gains.
The MSCI Asia Pacific Index climbed 0.2 percent as of 2:39 p.m. in Tokyo. Standard & Poor’s 500 Index futures were little changed, while Treasuries rebounded from the steepest loss in two weeks. Zinc and nickel increased 0.3 percent each in London. Corn and wheat snapped a four-day drop. Crude was little changed near a four-month low after earlier jumping as much as 0.9 percent in New York. The won rose 0.3 percent versus the dollar. The euro slid 0.1 percent to $1.4275, erasing earlier gains.
Asian equities are still set for the steepest monthly loss in more than a year, and commodities are bound for their biggest quarterly slump since 2008 on concern Europe’s debt crisis will worsen and the global recovery is slowing. Germany welcomed proposals from French lenders on voluntary participation in a rollover of debt by Greece, where lawmakers will vote on budget cuts needed to avoid default tomorrow. U.S. data today may show home prices fell, while consumer confidence improved.
“A number of markets, not only equities but also commodities, are oversold,” Jason Schenker, Austin, Texas-based president of Prestige Economics LLC, said in a Bloomberg Television interview. “There’s a lot to be optimistic about even if U.S. growth isn’t at ‘potential’ levels.”
About five shares advanced for every four that declined on MSCI’s Asia Pacific Index, which has dropped 3.9 percent this month. That will be its worst monthly performance since May 2010, when the gauge sank 9.8 percent. Japan’s Nikkei 225 Stock Average jumped 0.6 percent and Australia’s S&P/ASX 200 Index rose 0.2 percent.
Banks, Mining Shares
Financial companies were the biggest contributors to gains on the regional index, with Westpac Banking Corp. (WBC) rising 1.9 percent. A gauge of banks, insurers and developers on the MSCI Asia Pacific has dropped 5.9 percent this year, sending valuations down to 11.4 times estimated profit this month, the lowest level since October 2008. Raw-material suppliers tracked the rebound in commodities, with Newcrest Mining Ltd. (NCM) rallying 1.4 percent and PetroChina Co. gaining 1.4 percent.
The GSCI index of commodities has dropped 11 percent since March 31, which will be its largest quarterly loss since the period ended December 2008. Wheat and crude oil are among the worst performers this quarter. The gauge was little changed today after sliding yesterday to a five-month low.
Silver for immediate delivery climbed 0.4 percent to $33.7194 an ounce, halting a four-day, 7.6 percent slump. December-delivery corn rose 0.7 percent to $6.31 a bushel, also snapping a four-day drop, while wheat futures gained 0.7 percent.
Crude for August delivery was little changed at $90.56 a barrel on the New York Mercantile Exchange. Futures fell 0.6 percent to $90.61, the lowest settlement since Feb. 18.
South Korea’s won climbed to at 1,083.05 per dollar after the Bank of Korea said the nation’s current-account surplus widened to $2.26 billion in May, compared with a revised $1.28 billion in April. The surplus in June will likely be at a similar level, central bank director Yang Jae Ryong said.
“Expectations that Greek creditors are probably headed toward a rollover agreement are boosting stocks and the currency,” said Ha Jun Woo, currency dealer at Daegu Bank in Seoul. “The current account, which had a surplus, also supports the won.”
The euro earlier climbed to $1.438, after gaining 0.7 percent yesterday. Greek Prime Minister George Papandreou called on lawmakers to obey their “patriotic conscience” and back tougher austerity measures, as they began to debate a five-year budget plan yesterday.
France proposed a target of rolling over 70 percent of Greece’s debt. Half the debt held by banks and insurers maturing in the next three years would be swapped for new 30-year bonds. The redemptions from another 20 percent would be invested in a special purpose vehicle that would serve as collateral, two people familiar with the plan said.
“The initial reaction is fairly positive” for the euro, said Grant Turley, a senior currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “French banks are arguably the largest private sector holders of Greece debt.”
The Dollar Index, which tracks the U.S. currency against those of six major trading partners, slid as much as 0.3 percent. Treasuries rose, sending 10-year yields down two basis points to 2.91 percent.
S&P/Case-Shiller’s index of property values in 20 cities fell 4 percent from April last year, the biggest drop since November 2009, according to the median forecast of economists surveyed by Bloomberg News. Separate data may show an index of consumer confidence climbed to 61 in June after reaching a six- month low of 60.80 in May.
The S&P 500 climbed 0.9 percent yesterday, snapping three- day, 2.1 percent loss. Nike Inc. (NKE) jumped more than 4 percent in extended trading after the world’s largest sporting-goods company reported fourth-quarter profit that surpassed analysts’ estimates as sales climbed in North America.
“We see the current rebound in the U.S. as sustainable,” said Andrew Shipley, a strategist at Singapore-based Komodo Capital Management. “Economic growth is poised to accelerate going forward. It’s a benign backdrop.”
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