Asia Stocks Rise as Europe Policy Makers Pledge Low RatesAdam Haigh
Asian stocks rose, with the regional index on course for a second week of gains, as European policy makers signaled they will keep interest rates low for longer.
Komatsu Ltd., a maker of construction and mining equipment that gets 80 percent of sales offshore, gained 2.4 percent in Tokyo. BHP Billiton Ltd., the world’s biggest miner, climbed 1.2 percent in Sydney, leading an advance among resource companies. Samsung Electronics Co. sank 3.8 percent in Seoul after the world’s largest television maker missed estimates for second-quarter earnings.
The MSCI Asia Pacific Index gained 1.1 percent to 132.06 as of 6:27 p.m. in Hong Kong, with all of its 10 industry groups climbing. The gauge is headed for a 1.2 percent advance this week. Futures on the Standard & Poor’s 500 Index gained 0.9 percent, with U.S. equity markets poised to rise after a public holiday.
“The European Central Bank and the Bank of England have both come out and tried to combat the rise in bond yields with some forward guidance,” Keith Poore, Wellington-based head of investment strategy at AMP Capital Investors Ltd., which manages more than $130 billion, said by telephone. “The market was surprised by the dovish comments. Global growth is picking up and this should flow through to earnings.”
Japan’s Topix index added 1.5 percent, with trading volume 19 percent below the 30-day average. The Nikkei 225 Stock Average gained 2.1 percent, led by exporters, as the yen weakened for a second day.
Hong Kong’s Hang Seng Index climbed 1.9 percent and the Shanghai Composite Index gained 0.1 percent. Australia’s S&P/ASX 200 Index advanced 1 percent. New Zealand’s NZX 50 Index climbed 0.7 percent. Singapore’s Straits Times Index rose 0.9 percent and Taiwan’s Taiex Index jumped 1.4 percent. South Korea’s Kospi index fell 0.3 percent.
European Central Bank President Mario Draghi pledged to keep interest rates at a record low for an “extended period” yesterday after Bank of England chief Mark Carney said increases in market rates weren’t warranted.
The rhetoric contrasts with that from the U.S. Federal Reserve, which has fueled global equity declines by signaling stimulus may be reduced this year. U.S. employers probably added almost as many workers last month as in May and the jobless rate probably fell, according to Bloomberg surveys of economists before the data due today.
U.S. Treasury yields soared to 2.61 percent on June 25, the highest level since August 2011, as an improving economy dimmed the lure of bonds as a haven. Global stocks have slumped since May 20 after Fed Chairman Ben S. Bernanke said the central bank may reduce bond purchases if the U.S. economy improves in line with forecasts.
The U.S. unemployment rate probably fell to 7.5 percent in June, matching April’s four-year low and down from 7.6 percent in May, according to the median estimate of 82 economists surveyed by Bloomberg ahead of a Labor Department report due today.
Exporters gained. Komatsu rose 2.4 percent to 2,328 yen. Toyota Motor Corp., the world’s largest carmaker, added 2.1 percent to 6,310 yen. Nissan Motor Co. advanced 1.9 percent to 1,056 yen.
Commodity producers posted the largest gains among the 10 industry groups on the MSCI Asia Pacific gauge. BHP Billiton gained 1.2 percent to A$31.60 in Sydney. Kobe Steel Ltd., Japan’s third-largest steelmaker, added 7.6 percent to 142 yen. Aluminum Corp. of China Ltd., the nation’s biggest producer of the lightweight metal, jumped 2.5 percent to HK$2.42 in Hong Kong.
The MSCI Asia Pacific Index fell 9.5 percent through yesterday from a five-year high on May 20 amid concern that the Fed will begin tapering stimulus as China’s economy slows and Japan puts off unveiling economic reform policies until after upper house elections later this month.
That left the gauge trading at 12.7 times average estimated earnings yesterday compared with 14.7 for the Standard & Poor’s 500 Index and 12.9 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Temasek Holdings Pte, the biggest foreign investor in Chinese banks, said it’s not concerned by a cash crunch and plans to increase its assets in the nation.
Industrial & Commercial Bank of China Ltd., the world’s largest lender, gained 3.2 percent to HK$4.82 in Hong Kong. China Construction Bank Corp. added 2.3 percent to HK$5.36. Agricultural Bank of China Ltd. rose 1.7 percent to HK$3.08.
Crown Ltd., the gaming company controlled by billionaire James Packer, gained 3.2 percent to A$12.60 in Sydney as it moved a step closer to developing a A$1.3 billion ($1.2 billion) casino in Sydney, beating a rival proposal from Echo Entertainment Group Ltd. Echo sank 5.2 percent to A$2.76.
Crown’s plan for a hotel and casino will proceed to the next stage of a government approval process, New South Wales Premier Barry O’Farrell said today. The plan would boost tourism and contribute more to the state economy than Echo’s proposal for a A$1.1 billion redevelopment of its existing Star casino, the state government said.
Among stocks that fell, Samsung lost 3.8 percent to 1.267 million won in Seoul as operating profit rose to about 9.5 trillion won ($8.3 billion) in the three months to June from 6.5 trillion won a year earlier. That compares with the 10 trillion won average estimate of 34 analysts surveyed by Bloomberg.
China Rongsheng Heavy Industries Group Holdings Ltd. tumbled 16 percent to 89 Hong Kong cents as China’s biggest shipyard outside state control said it’s seeking support from the government and its largest shareholder amid a plunge in orders and prices.