Japanese, Australia Stock Futures Rise on Takeovers, Valuations
Japanese and Australian stock futures rose as global markets rebounded amid increasing corporate takeovers, rising commodity prices and reduced valuations that investors say make stocks from New York to London and Tokyo “cheap.”
American depositary receipts of Sony Corp. (6758), a Japanese maker of smartphones, climbed 1.5 percent from the closing share price in Tokyo. Those of Mitsubishi Corp. (8058), Japan’s largest commodities trader, increased 0.3 percent. ADRs of Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, advanced 0.8 percent after crude prices jumped.
Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in September closed at 9,135 in Chicago yesterday, compared with 9,060 in Osaka, Japan. They were bid in the pre-market at 9,130 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index gained 0.6 percent today. New Zealand’s NZX 50 Index rose 1 percent in Wellington.
“Large-scale acquisitions are increasing in the U.S., indicating stocks are relatively cheap,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “There’s no doubt that Japanese stocks are cheap in terms of valuations and the rebound will continue.”
Futures on the Standard & Poor’s 500 Index slid 0.2 percent today. In New York, the index gained 2.2 percent to 1,204.49 yesterday, erasing last weeks’ drop, as $21.5 billion in takeovers and valuations near the cheapest level in two years helped the Standard & Poor’s 500 Index extend its best three-day rally since 2009.
Google Inc., the biggest maker of smartphone software, agreed to buy Motorola Mobility Holdings Inc. for $12.5 billion in its largest acquisition, gaining mobile patents and expanding in the hardware business.
“Google’s buying a hardware company indicates the smart phone market will grow from now on,” Nakanishi said. “High- tech and smartphone-related stocks may attract investors.”
Benchmark gauges in the U.S. also rose after Federal Reserve Bank of Atlanta President Dennis Lockhart said the central bank could purchase more Treasuries or alter its balance sheet if the U.S. economy were to slow further. “If additional actions are required, I can assure you the Federal Reserve is not out of bullets,” Lockhart said yesterday in a speech in Florence, Alabama.
European stocks gained, extending the biggest three-day rally for the benchmark Stoxx Europe 600 Index in 15 months, after last week sliding to the cheapest valuation in more than two years.
The Stoxx 600 advanced 0.2 percent to 237.85 in London. The gauge has rallied 6.4 percent over the past three days after a global equity rout left stocks trading at the cheapest since March 2009 amid concern the global economic recovery is stalling.
The MSCI Asia Pacific Index lost 9.7 percent this year through yesterday, compared with drops of 4.2 percent by the S&P 500 and 13.8 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.5 times estimated earnings on average, the lowest since December 2008, compared with 12.1 times for the S&P 500 and 9.8 times for the Stoxx 600.
Crude oil for September delivery increased 2.9 percent to settle at $87.88 a barrel in New York yesterday. Copper futures for December delivery gained 0.5 percent.
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