Asian Stocks Rise on Global Economic Outlook, Stimulus
Asian stocks rose, with the regional benchmark index heading for its biggest advance in three weeks, after global manufacturing reports beat forecasts and central banks vowed to maintain stimulus.
Honda Motor Co., which gets about 83 percent of sales outside of Japan, advanced 2.9 percent, pacing gains among exporters after the yen fell the most since April. Sharp Corp., which supplies screens to Apple Inc., rose 3.4 percent in Tokyo after posting a narrower loss than expected. Hutchison Whampoa Ltd., controlled by Asia’s richest person Li Ka-shing, jumped 4.5 percent in Hong Kong after reporting profit that surpassed expectations amid growth at its infrastructure business.
The MSCI Asia Pacific Index advanced 1 percent to 134.9 as of 7:42 p.m. Tokyo time, with more than two shares rising for each that fell. All 10 industry groups rose on the gauge. The measure is heading for a 0.4 percent decline this week, its first such drop in six weeks.
“The bulls have regained control,” Matthew Sherwood, head of markets research in Sydney at Perpetual Investments, which manages about $25 billion, said in an e-mail. “Fears eased about the global economy and reassuring comments from central banks confirmed that the money glut will continue.”
Factory output from the U.S. to China and Europe expanded in July, reports yesterday showed, while American jobless claims fell to a five-year low. The data came as European Central Bank President Mario Draghi said interest rates will probably remain low for an extended period and after the Federal Reserve retained its $85 billion-a-month bond buying program.
The MSCI Asia Pacific Index advanced 1.3 percent last month after China pledged to do more to support a transition from reliance on exports to domestic demand in the world’s second-largest economy. Shares on the gauge traded at 13 times estimated earnings as of yesterday, compared with 15.5 times for the Standard & Poor’s 500 Index and 13.7 times for the Stoxx Europe 600 Index.
Japan’s Topix index climbed 2.8 percent and the benchmark Nikkei 225 Stock Average jumped 3.3 percent today, with both gauges closing higher for a second day. South Korea’s Kospi index added 0.1 percent, while Taiwan’s Taiex index rose 0.5 percent. Australia’s S&P/ASX 200 Index closed 1.1 percent higher and New Zealand’s NZX 50 Index increased 0.8 percent.
Japan’s Topix has climbed 39 percent this year amid optimism Prime Minister Shinzo Abe will push through reforms while the Bank of Japan continues record stimulus to beat deflation.
The Shanghai Composite Index (SHCOMP) was little changed and the Hang Seng China Enterprises Index of mainland companies in Hong Kong added 0.1 percent. The city’s benchmark Hang Seng Index climbed 0.5 percent. The measure fell 2.5 percent this year through yesterday, the worst performance among developed markets tracked by Bloomberg.
China’s non-manufacturing purchasing managers’ index is scheduled to be released tomorrow. The nation’s manufacturing gauge unexpectedly strengthened in July, data yesterday showed.
Indonesia’s Jakarta Composite Index added 0.2 percent, paring an earlier advance of 0.7 percent. The nation’s economic growth slowed to 5.8 percent in the second quarter from 6 percent in the previous three months, according to government figures released today. That compares with the median estimate of 5.9 percent in a Bloomberg survey of economists.
Futures on the Standard & Poor’s 500 Index (SPX) rose 0.1 percent ahead of nonfarm-payroll and unemployment data today. The U.S. benchmark gauge jumped 1.3 percent yesterday, sending it above 1,700 for the first time as a report showed applications for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, from a revised 345,000 the prior week.
The Institute for Supply Management’s U.S. factory index increased to 55.4 in July, the strongest since June 2011, from 50.9 in the prior month. Readings above 50 indicate expansion. Labor Department data today may show U.S. employers added 185,000 people to payrolls in July as the jobless rate fell to 7.5 percent from 7.6 percent, according to Bloomberg surveys of more than 80 economists.
Manufacturing growth in the U.K. accelerated in July, while a factory gauge for the euro-area resumed growth after two years of contraction, separate reports released yesterday showed.
Automakers advanced, leading Asian exporters higher, as companies reported increased sales in the U.S. last month. Honda, whose sales beats analyst estimates, climbed 2.9 percent to 3,710 yen in Tokyo. Toyota, the world’s largest carmaker, gained 3.4 percent to 6,430 yen before reporting first-quarter earnings that beat estimates.
Sharp rose 3.4 percent to 425 yen in Tokyo. The company posted a first-quarter net loss of 18 billion yen ($182 million), compared with a 138 billion yen loss a year earlier. That was lower than the median loss estimate of 24 billion yen by three analysts surveyed by Bloomberg News.
Hutchison Whampoa jumped 4.5 percent to HK$91.65 in Hong Kong. Net income rose 23 percent to HK$12.4 billion ($1.6 billion) in the six months through June, the Hong Kong-based company said yesterday. That compares with the HK$10.8 billion median of three analysts’ estimates compiled by Bloomberg News. Neptune Orient Lines Ltd. and Rio Tinto Group are scheduled to report next week.
Of the 283 companies on the MSCI Asia Pacific Index that have posted results since July 1 and for which estimates are available, 51 percent exceeded estimates, according to data compiled by Bloomberg. More than 90 companies on the gauge are posting results this month.
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