Asian Stocks Edge Higher on Signs U.S. Weathering Europe Crisis
Asian stocks (MXAP) edged higher, lifted by signs of U.S. economic recovery, as the region’s benchmark index ended 2011 with its first annual decline in three years.
Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, gained 2 percent today in Tokyo. Techtronic Industries Company Ltd., a maker of industrial products that gets about 73 percent of its revenue in North America, added 0.9 percent in Hong Kong. Inpex Corp. (1605), Japan’s No. 1 energy explorer, advanced 0.4 percent after oil prices gained. Power Finance Corp. gained 5.1 percent in Mumbai after announcing a bond sale.
The MSCI Asia Pacific Index (MXAP) added 0.4 percent to 113.25 as of 7:11 p.m. in Tokyo, with all but one of the 10 industry groups advancing. The measure lost 18 percent this year as China took steps to cool its property market and Europe struggled to resolve its debt crisis.
“Markets will continue to be unstable for the first quarter of next year,” said Masaru Hamasaki, Tokyo-based chief strategist at Toyota Asset Management Co., which oversees the equivalent of $24 billion. “European nations will need to unite as they debate how to rehabilitate the region’s finances. The leadership will be tested.”
The Asia Pacific gauge has lost about $1.78 trillion this year amid concern Europe’s three-year debt crisis will drag the global economy into recession. Stocks on Asia’s benchmark are valued at 12.6 times estimated earnings on average, compared with 12.6 times for Standard & Poor’s 500 Index (SPXL1) and 10.5 times for the Stoxx Europe 600 Index.
Utilities have fallen 26 percent this year, dropping the most among the 10 industry groups on the Asian gauge. Japanese power producers tumbled amid a nuclear crisis at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. The utility has lost 91 percent this year, the biggest drop on the MSCI All Country World Index (MXWD).
Japan’s Nikkei 225 Stock Average (NKY) gained 0.7 percent today. Trading volume was 53 percent below the 100-day average ahead of a four-day weekend. Hong Kong’s Hang Seng Index rose 0.2 percent. Australia’s S&P/ASX 200 lost 0.4 percent. South Korea’s market was closed today for a holiday.
Futures on the S&P 500 Index slipped less than 0.1 percent. The gauge advanced 1.1 percent yesterday in New York after a report showed a jump in pending sales of existing homes that exceeded economist estimates by almost five times.
‘Data’s Looking Good’
“Investors increasingly feel the U.S. economy is firmer than they had expected,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “The economic data is looking good and that will boost stock markets, especially when concern about Europe’s debt issues aren’t in the forefront.”
Exporters to the U.S rose. Sony added 2 percent to 1,382 yen in Tokyo, while Techtronic Industries rose 0.9 percent to HK$7.99.
Gains in stocks were limited after Italy yesterday fell short of its target in a debt auction. Prime Minister Mario Monti said his government won’t “rule out” more aggressive efforts to reduce debt.
Inpex advanced 0.4 percent to 485,000 yen after West Texas Intermediate crude for February delivery gained as much as 0.5 percent to $100.16 a barrel on the New York Mercantile Exchange.
Power Finance (POWF) rose the most on the Asia Pacific index after R. Nagarajan, executive director for finance, said the New Delhi-based company plans to sell at least 1.5 billion rupees ($28 million) of bonds next week. The stock gained 5.1 percent to 138.75 rupees.
Among other stocks that advanced, Japanese engineering company Chiyoda Corp. (6366) gained 2.1 percent to 783 yen. The Nikkei newspaper reported the company will likely beat its forecast for operating profit by up to 3 billion yen ($39 million) in the year ending March due to lower-than-expected costs on a liquefied natural gas project in Qatar.
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