Asian Stocks Advance After Congress Passes Debt DealJonathan Burgos
Asian stocks rose, with the regional benchmark index headed toward a five-month high, after the U.S. Congress voted to end the government shutdown and raise the debt ceiling.
Nissan Motor Co., which gets about 34 percent of its car sales from North America, gained 2.2 percent in Tokyo. Kansai Electric Power Co. added 2.8 percent after the Japanese utility reported an unexpected first-half profit. Boral Ltd. advanced 5.9 percent after USG Corp. agreed to pay the Australian company as much as $575 million to form a jointly owned building-materials business spanning Asia and the Middle East.
The MSCI Asia Pacific Index gained 1 percent to 142.41 as of 5:08 p.m. in Tokyo, with about two shares rising for each that fell. The U.S. fiscal impasse ended as the Senate and the House of Representatives voted to halt the government shutdown and raise the U.S. debt limit as the deadline loomed today. President Barack Obama said he will immediately sign the bill.
“Even though it doesn’t change anything, at least for the moment there’s a relief that there will be no U.S. default, at least before the new year,” Toby Lawson, head of futures, options and cash equities for the Asia-Pacific at Newedge Group SA in Sydney, said by telephone. “Investors can now focus on economic fundamentals. Europe is showing reasonable signs that the worst is over and the bearish view on China isn’t playing out.”
China is scheduled to release a slew of data tomorrow. The world’s second-largest economy may have grown last quarter at the fastest pace this year, according to a Bloomberg survey of economists.
The nation’s GDP probably expanded 7.8 percent in the third quarter year-on-year, after growing 7.5 percent in the previous three months, according to the median of about 50 estimates in a Bloomberg survey before tomorrow’s data. The nation will also release factory output and retail sales figures for September.
Singapore’s Straits Times Index climbed 0.5 percent. The nation’s exports fell 1.2 percent in September from a year earlier, according to a report by International Enterprise Singapore. Shipments were expected to drop 2.8 percent, according to a Bloomberg survey.
South Korea’s Kospi index advanced 0.3 percent. The nation’s producer prices index dropped 1.8 percent in September from a year earlier after falling 1.3 percent in August, the Bank of Korea said today.
Japan’s Topix Index gained 0.8 percent. Taiwan’s Taiex Index increased 0.5 percent. Australia’s S&P/ASX 200 Index and New Zealand’s NZX 50 Index both added 0.4 percent. China’s Shanghai Composite Index slipped 0.2 percent, while Hong Kong’s Hang Seng Index dropped 0.6 percent.
The MSCI Asia Pacific Index gained 1.3 percent last week amid optimism U.S. lawmakers were moving closer to resolving the debt impasse. The gauge traded at 13.6 times estimated earnings yesterday, compared with 15.6 for the Standard & Poor’s 500 Index and 14.5 for the Stoxx Europe 600 Index.
S&P 500 futures slid 0.4 percent today. The equity gauge jumped 1.4 percent yesterday as the Senate crafted a bipartisan deal to end the government shutdown and raise the debt ceiling. House lawmakers today voted 285-144 to clear the measure, which has since been signed by Obama. The Senate earlier passed the bill 81-18.
The deal concludes a fiscal standoff that began with Republicans demanding the defunding of Obama’s 2010 health-care law and objecting to raising the debt limit and funding the government without attaching policy conditions. They achieved almost none of those goals in the agreement.
The partial government shutdown also delayed the release of key data needed to gauge the outlook for Fed stimulus. Global equities have rallied 15 percent this year as the Fed maintained efforts to boost the U.S. economy by holding interest rates near zero and purchasing $85 billion of bonds each month under a program known as quantitative easing.
“Because of the disruption, because of the uncertainty, what’s likely to happen is a slower pace of tapering by the Fed,” said Russ Koesterich, the chief investment strategist at BlackRock Inc., the world’s largest money manager with $4.1 trillion in assets as of Sept. 30.
Exporters advanced. Nissan climbed 2.2 percent to 1,022 yen in Tokyo. Samsung Electronics Co., the world’s biggest smartphone maker, added 0.9 percent to 1.463 million won in Seoul. Yue Yuen Industrial Holdings Ltd., which makes shoes for Nike Inc., rose 1.9 percent to HK$21.35 in Hong Kong.
Kansai Electric increased 2.8 percent to 1,327 yen. The utility reported a first-half net income of 15 billion yen ($153 million), beating the company’s prediction of a 32 billion yen loss.
Luk Fook Holdings International Ltd. advanced 3.7 percent to HK$26.65 after the Hong Kong jeweler said same-store sales in Hong Kong and Macau increased 30 percent in the three months ended September and climbed 70 percent in China in the same period.
Boral jumped 5.9 percent to A$5.03 in Sydney. The Australian company will fold its gypsum unit into the joint venture with Chicago-based USG, the companies said. Under the terms of the agreement, USG will pay Boral $500 million in cash when the deal is completed -- scheduled for January 2014 -- and as much as $75 million if the venture, named USG Boral Building Products, meets certain earnings targets.
Toko Inc., a maker of semiconductors and power supplies, rose 3.3 percent to 344 yen. Murata Manufacturing Co., a supplier of components to Apple Inc. and Samsung Electronics, may need to increase its 300-yen-a-share bid for Toko to ensure support for its offer, according to Lee Mitchell, a special situations sales trader at Religare Capital Markets Ltd., in Singapore. Murata added 0.9 percent to 7,590 yen.