Asian Stocks Rise From Five-Week Low on U.S. Factory Data
Asian stocks rose, with the regional benchmark rebounding from a five-week low, as data showing improvement in U.S. factory output boosted optimism for the world’s biggest economy.
LG Electronics Inc., the world’s second-biggest maker of televisions, added 4.2 percent in Seoul. Lippo Ltd., founded by Indonesian tycoon Mochtar Riady, surged by the most since it started trading under its current name after South Korea approved a proposal by the company and Las Vegas-based partner Caesars Entertainment Corp. to build a casino. Tencent Holdings Ltd. (700), Asia’s biggest Internet company, jumped 5.8 percent, snapping a four-day decline, before releasing earnings tomorrow.
The MSCI Asia Pacific Index climbed 0.6 percent to 134.84 at 7:29 p.m. in Tokyo as more than two shares rose for every one that fell. The gauge slumped 3.5 percent last week as Chinese economic data disappointed investors. U.S. factory production in February rose by the most in six months, according to the Federal Reserve, which announces the outcome of its two-day monetary policy meeting tomorrow.
“We’ve seen an improvement in industrial production after the cold weather and that’s positive,” Keith Poore, who helps manage $131 billion as Wellington-based head of investment strategy at AMP Capital Investors Ltd., said by phone. “Tapering doesn’t seem to be too much of an issue for investors, who are more concerned on when the Fed will start raising interest rates. We don’t expect an interest-rate hike this year.”
The Fed Open Market Committee will further scale back its bond-buying program at the meeting, reducing purchases for the third time by $10 billion to a $55 billion monthly rate, according to the median estimate of 54 economists surveyed by Bloomberg from March 14-17.
Japan’s Topix added 1 percent. South Korea’s Kospi index rose 0.7 percent and Taiwan’s Taiex climbed 0.4 percent. Australia’s S&P/ASX 200 Index increased 0.5 percent, while New Zealand’s NZX 50 Index advanced 0.9 percent. Hong Kong’s Hang Seng Index gained 0.5 percent.
China’s Shanghai Composite Index rose 0.1 percent. New house-price growth slowed last month, led by the four Chinese cities the government defines as first tier, amid tighter credit to rein in excessive borrowing and individual city measures to curb property prices.
Closely held developer Zhejiang Xingrun Real Estate Co. was said to have collapsed with $567 million of debt, adding to concern of strains in the nation’s real estate sector and financial system. This comes less than two weeks after Shanghai Chaori Solar Energy Science & Technology Co. failed to repay its debt, the first onshore corporate-bond default.
“There’s always a little bit of worry when it comes to China,” AMP Capital’s Poore said. “We expect more volatility in China in the short-term. Bond defaults in China shouldn’t be a worry unless they have systemic implications.”
The MSCI Asia Pacific Index slipped 5.2 percent this year through yesterday.
President Vladimir Putin ordered the approval of Crimea’s accession to Russia a day after the U.S. and European Union imposed limited sanctions on some people linked to the annexation of the Ukrainian territory.
Some exporters advanced. LG Electronics climbed 4.2 percent to 62,400 won in Seoul. Samsung Electronics Co., the world’s biggest maker of smartphones, added 1 percent to 1.278 million won. Nissan Motor Co. (7201), a Japanese carmaker that gets about 80 percent of sales overseas, rose 2.2 percent to 869 yen.
Lippo surged 36 percent to HK$5.79 in Hong Kong. The company and Caesars will build a casino, hotel and shopping complex near the Incheon International Airport west of Seoul, South Korea’s tourism ministry said at a briefing today. The government granted preliminary approval for the first part of a project valued at as much as 2.3 trillion won ($2.2 billion).
Mitsubishi Electric Corp. (6503), a manufacturer of electronic equipment, gained 3.1 percent to 1,147 yen in Tokyo after saying it would raise its dividend to 11 yen from 6 yen a year earlier.
Tencent advanced 5.8 percent to HK$578 in Hong Kong after dropping 12 percent in the past four trading days. The company is expected tomorrow to report full-year net income of 15.9 billion yuan ($2.6 billion), according to the average estimate of 35 analysts tracked by Bloomberg. That compares with 12.7 billion yuan in profit for 2012.
“We are seeing a strong recovery in Tencent after a significant correction over the past few days, and as people cover their shorts ahead of the results announcement,” said Alex Wong, a Hong Kong-based director of asset management at Ample Capital Ltd.
China Longyuan Power Group Corp. tumbled 14 percent to HK$7.93 after the nation’s biggest wind-farm developer posted full-year profit that missed analyst estimates.
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