Asian Stocks Advance as G20 Pledges Support, Fed Meets
Asian stocks rose, with the regional benchmark index heading for its highest close in a month, amid speculation the Federal Reserve will expand stimulus measures and after the Group of 20 leaders pledged to support economic growth and help overcome Europe’s debt crisis.
Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, gained 3.5 percent after the country’s overseas shipments rose more than expected. Sumitomo Mitsui Trust Holdings Inc. jumped 4.3 percent after the Japanese bank said it plans to boost overseas loans this year. Consolidated Media Holdings Ltd. surged 9.7 percent in Sydney after News Corp. offered to buy Australia’s largest pay television network for A$2 billion ($2 billion).
The MSCI Asia Pacific Index (MXAP) climbed 1 percent to 116.95 as of 7:58 p.m. in Tokyo, set for its highest close since May 15. About three shares rose for each that fell on the gauge. More than $5 trillion has been erased from global equities since March amid slowing economic growth in the U.S. and China, and a spreading European crisis that pushed Spain’s borrowing costs to a record.
“There will be more measures taken by central banks to stimulate the economy,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking, where she helps oversee about $207 billion. “China also has more flexibility to ease monetary and fiscal policy.”
With contagion from Europe’s crisis rippling through the world economy, participants at the G-20 summit in Mexico backed measures to spur growth and cut budgets in Europe.
Japan’s Nikkei 225 Stock Average (NKY) advanced 1.1 percent after exports climbed 10 percent from a year earlier, according to data released by the Finance Ministry in Tokyo today. Imports increased 9.3 percent and the country reported a wider trade deficit in May than economists predicted as nuclear-plant shutdowns pushed up energy purchases from abroad.
“I did not expect that exports are this strong given the current world economic situation,” said Takao Goto, a market analyst at SBI Securities Co., Japan’s biggest online brokerage. “This is positive news for the market.”
Sony climbed 3.5 percent to 1,103 yen. Toyota Motor Co., the world’s biggest carmaker by market value, rose 1.2 percent to 3,050 yen. Panasonic Corp. (6752), Japan’s largest appliance maker, increased 3.1 percent to 602 yen.
Australia’s S&P/ASX 200 Index rose 0.2 percent. South Korea’s Kospi Index added 0.7 percent. Hong Kong’s Hang Seng Index increased 0.5 percent, while China’s Shanghai Composite Index lost 0.3 percent. Trading volumes were below the 30-day average, according to data compiled by Bloomberg News.
Futures on the Standard & Poor’s 500 Index were little changed today. The gauge advanced 1 percent yesterday and closed at its highest level in more than a month as analysts at JPMorgan Chase & Co., Jefferies & Co. and Goldman Sachs Group Inc. speculated the U.S. Fed will move to spur growth.
Signs of slowing growth amid Europe’s debt crisis could mean the Fed, which began a two-day meeting yesterday, will extend its so-called Operation Twist, according to JPMorgan and Jefferies. The program involves selling short-term debt and buying longer-term bonds.
Exporters to the U.S. advanced. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., rose 1.9 percent to HK$15.76 in Hong Kong. James Hardie Industries SE (JHX), a building materials supplier that counts the U.S. as its biggest market, gained 0.8 percent to A$7.77 in Sydney.
Sumitomo Mitsui Trust climbed 4.3 percent to 221 yen in Tokyo. Japan’s fourth-biggest bank by market value is targeting 900 billion yen ($11.4 billion) in new overseas loans this year as it buys assets of European lenders and provides credit for infrastructure in Asia, Shigeki Tanaka, general manager of wholesale business planning, said in an interview on June 18.
The MSCI Asia Pacific Index lost 10 percent through yesterday from this year’s highest level in February amid signs economic growth was slowing as Europe struggled to contain its debt crisis. This left the gauge trading at 1.1 times book value, compared with 2.1 times for the S&P 500 and 1.4 times for the Stoxx 600, according to data compiled by Bloomberg. A number below one means companies can be bought for less than value of their assets.
Consolidated Media jumped 9.7 percent to A$3.38 in Sydney. News Ltd., the Australian unit of the media company controlled by Rupert Murdoch, offered to buy shares in the owner of pay-TV network Foxtel and Fox Sports at A$3.50 each, 14 percent more than yesterday’s closing price. The deal is subject to approval by regulators and both companies’ boards.
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