Asia Stocks Snap Loss Streak as Greece Exit Concern Eases
Asian stocks rose, with the regional benchmark index climbing from a five-month low, as concern eased that Greece may exit the euro, outweighing a report that profit growth slowed at China’s industrial companies.
Nintendo Co. (7974), a Japanese maker of game consoles that depends on Europe for a third of its sales, climbed 3.5 percent. BHP Billiton Ltd., the world’s biggest mining company, advanced 1.4 percent in Sydney. Renesas Electronics Corp. (6723) sank 11 percent after a person briefed on the matter said the maker of semiconductors used in cars and appliances plans to raise 100 billion yen ($1.3 billion) and cut more than 10,000 jobs.
The MSCI Asia Pacific Index climbed 0.7 percent to 112.44 as of 7:47 p.m. in Tokyo. The gauge is heading for a 10 percent decline this month, the biggest monthly drop since October 2008, as slumping loan demand and factory output in China add to signs of a deeper slowdown in the world’s second-largest economy, and as European leaders pressure Greece to meet bailout terms before elections next month.
“There will be no exit by Greece,” Binay Chandgothia, a Hong Kong-based portfolio manager at Principal Global Investors, which manages $250 billion globally, said on Bloomberg Television. “If they take structurally positive steps, things will be all right in the long run. China is a little bit of a concern but China has policy levers. They can use policy incentive to get growth back on track.”
The MSCI Asia Pacific Index, a U.S. dollar denominated gauge, rose as the yen gained for the first time in three days. Japan’s Topix Index (TPX) slid 0.1 percent. The index last week capped an eight week stretch of declines, the longest losing streak since 1977.
‘Misunderstanding’ The BOJ
Bank of Japan board members said they need to avoid any “misunderstanding” that central bank asset purchases will automatically increase, according to minutes of an April 27 policy meeting released today.
Hong Kong’s Hang Seng Index (HSI) gained 0.5 percent and Singapore’s Straits Times Index advanced 0.5 percent. Australia’s S&P/ASX 200 Index advanced 1 percent. South Korea’s markets were closed today.
Greek opinion polls showed voters warming to parties supporting the European Union’s bailout, easing concern the country will exit the currency bloc.
The New Democracy party, which supports the rescue plan negotiated with international lenders, led by a margin of as much as 5.7 percentage points over Syriza, the main party opposed to implementing the terms of financial aid packages, according to a poll by Kapa Research SA for To Vima newspaper.
Futures on the Standard & Poor’s 500 Index climbed 0.8 percent today. The index slid 0.2 percent in New York on May 25, paring its first weekly rally since April. Financial markets in the U.S. are closed for the Memorial Day holiday.
Declines in equities dragged the average price of stocks on the MSCI Asia Pacific Index (MXAP) to 11.5 times estimated earnings on May 25, compared with a multiple of 12.6 for the S&P 500 and 10.1 for the Stoxx 600.
Chinese industrial companies’ profit growth fell in April as the nation’s slowing economy curbed demand, a National Bureau of Statistics report showed. China’s State Council said on May 23 that downside risks to growth are increasing and the government will intensify “fine-tuning” policies as needed.
Gome Electrical Appliances Holding Ltd., an electronics retailer, slumped 4.6 percent to HK$1.26 after first-quarter profit plunged 88 percent.
To contact the reporter on this story: Adam Haigh in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Gentle at email@example.com