Australian Shares Gain on Profit, Japan Futures Little Changed

Australian shares rose to the highest level in nearly three years as investors dissected earnings reports at companies from Commonwealth Bank of Australia to CSL Ltd. Japanese stock futures were little changed as the yen jumped, curbing the earnings outlook for exporters.

Commonwealth Bank of Australia, the nation’s largest lender, climbed 2.6 percent as retail banking and wealth management boosted first-half profit by 1 percent. CSL advanced 1 percent as Australia’s biggest pharmaceutical company reported a 24 percent increase in first-half profit. Shares of THK Co. may be active in Tokyo as the maker of industrial machinery increased its full-year profit forecast 11 percent.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 11,370 in Chicago yesterday, up from 11,340 at the close in Osaka, Japan. They were bid in the pre-market at 11,350 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.7 percent, headed for the highest closing level since April 2010. New Zealand’s NZX 50 Index slid 0.2 percent.

Equity markets in Singapore and Malaysia reopen today after a public holiday, while markets in China, Hong Kong, Taiwan, and Vietnam remain shut.

Of the 299 companies on the MSCI Asia Pacific index that reported earnings this quarter and for which Bloomberg has estimates, 53 percent have exceeded profit expectations. Some 53 percent have missed sales projections. That compares with 74 percent of S&P 500 companies that topped profit forecasts during the period, while 34 percent fell short of sales estimates, data compiled by Bloomberg show.

U.S. Futures

The MSCI Asia Pacific Index, the benchmark regional equities gauge, traded at 14.9 times average estimated earnings compared with 13.7 for the S&P 500 and a multiple of 12.3 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The gauge climbed 0.2 percent yesterday to the highest level since November 2007 as earnings topped estimates and investors awaited President Barack Obama’s State of the Union address. That left the gauge less than 3 percent below its record of 1,565.15 reached in October 2007, while the Dow Jones Industrial Average is about 1 percent from its all-time high of 14,164.53.

The S&P 500 has rallied 6.5 percent in 2013 as U.S. lawmakers reached a budget compromise and companies reported better-than-estimated profits. That’s more than double the MSCI Asia Pacific Index’s gain of 3.1 percent this year through yesterday.

Yen Strengthens

The yen rose against all 16 major peers after an official from the Group of Seven nations, who requested not to be further identified, said the group is concerned about excess moves in the yen and investors misinterpreted an earlier statement on exchange rates. The clarification came hours after the world’s major industrial economies appeared to signal acceptance of a weaker Japanese currency as long as Prime Minister Shinzo Abe’s government didn’t actively pursue devaluation.

Data tomorrow may show Japan’s economy emerged from its third recession in five years last quarter as cold weather boosted consumption, bolstering Abe’s campaign to revive growth. Gross domestic product probably expanded an annualized 0.4 percent the three months through December, according to the median forecast in a survey of 32 economists. Banks including JPMorgan Chase & Co. and Citigroup Inc. raised their forecasts from a contraction this month after a gauge of consumption rose.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. climbed 0.2 percent to 96.33 in New York yesterday.

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