Asian Stocks Rise Before U.S. Vote as Utilities Advance
Asian stocks rose amid lower trading volume, with gains in Japanese utilities helping pare yesterday’s losses on the regional benchmark index, as investors awaited the results of the U.S. presidential election and a once-in-a-decade leadership change in China.
Kansai Electric Power Co. (9503) led a rebound in utilities after sliding yesterday as advisers to the regulator disagreed on the earthquake risk to the nation’s only operating nuclear plant. HSBC Holdings Plc dropped 1.4 percent in Hong Kong after saying it may face charges tied to money-laundering. Alumina Ltd. (AWC) lost 7.9 percent after an Indonesian court stopped an ore export ban that bolstered demand for the Australian miner’s product.
The MSCI Asia Pacific Index (MXAP) rose 0.2 percent to 122.49 as of 7:13 p.m. in Tokyo, having earlier fallen as much as 0.3 percent. U.S. voters go to the polls today to choose between President Barack Obama and Republican challenger Mitt Romney.
“It’s literally a dead heat,” E. William Stone, chief investment strategist at PNC Wealth Management in Philadelphia, said in a Bloomberg Television interview. His firm manages about $112 billion. “The market in a lot of ways just reflects that. It frankly doesn’t know which way it’s going to go. That’s why everyone seems to be waiting more than normal.”
Asia’s equity benchmark gained 12 percent through yesterday from this year’s low on June 4 as central banks added stimulus amid a slowdown in global economic growth and the European debt crisis. Shares on the measure trade at 13.4 times average estimated earnings, compared with 13.6 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index.
Futures on the S&P 500 added 0.3 percent today after the index yesterday gained 0.2 percent. Obama led Romney 48 percent to 45 percent in a national poll conducted Oct. 31 through Nov. 3 by the Pew Research Center, a survey that was deadlocked at 47 percent each a week ago.
Japan’s Nikkei 225 Stock Average (NKY) lost 0.4 percent on volume 15 percent below the 30-day average. South Korea’s Kospi gained 1.1 percent, while Taiwan’s Taiex Index climbed 0.7 percent, with about 26 percent fewer shares trading hands.
Australia’s S&P/ASX 200 Index (AS51) rose 0.2 percent. Stocks held gains after the Reserve Bank of Australia unexpectedly refrained from cutting its benchmark interest rate. The bank left the overnight cash-rate target at a developed-world high of 3.25 percent. Twenty of 27 economists surveyed by Bloomberg News predicted a cut to 3 percent.
Hong Kong’s Hang Seng Index (HSI) dropped 0.3 percent, retreating a second day from its highest close this year. The Shanghai Composite Index fell 0.4 percent.
China’s Communist Party starts its 18th Congress on Nov. 8 in Beijing, when delegates will meet over several days to pick a new leader. Xi Jinping will probably replace Hu Jintao as general secretary of the party that’s ruled China since 1949.
Japanese utilities were the four biggest gainers today on the MSCI Asia Pacific Index. Kansai Electric Power advanced 7.5 percent to 618 yen, reversing losses yesterday that came as regulators delayed a decision on whether to allow the utility’s Ohi plant in western Japan to keep operating. Seismologists, who meet again tomorrow, disagreed on the plant’s quake risk.
“Shares bounced back today after a selloff yesterday that was really unwarranted given the fact that the decision on whether to keep running the Ohi plant comes tomorrow,” said Hideyuki Suzuki, a senior market analyst at Tokyo-based brokerage SBI Securities Co. ‘
Declines among Japan’s power producers in the wake of the Fukushima disaster have driven a gauge tracking Asian utilities down 2.5 percent this year. That matches the biggest decline among the MSCI Asia Pacific Index’s 10 industry groups. A measure of raw material producers also fell 2.5 percent.
Among shares that dropped today, HSBC fell 1.4 percent to HK$76.70 in Hong Kong. The lender said it’s likely to face criminal charges from U.S. anti-money-laundering probes and the cost of a settlement may “significantly” exceed the $1.5 billion it has set aside.
Alumina lost 7.9 percent to 87 Australian cents after Indonesian Supreme Court annulled regulation by the energy minister that banned the exports of mineral ores. The export ban meant less competition for Alumina, partner in the world’s biggest producer of the material used to make aluminum.
Dainippon Screen Manufacturing Co. (7735) plunged 16 percent to 406 yen in Tokyo to lead declines on the Nikkei 225 Stock Average after the chip-equipment maker unexpectedly reversed its full-year forecast to net loss of 14 billion yen ($175 million) from 500 million yen profit and canceled an annual dividend of 5 yen per share.
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