Bloomberg News

Asia Stocks Swing Between Gains, Losses on Greece Debt Optimism

June 07, 2011

June 7 (Bloomberg) -- Asian stocks swung between gains and losses after European Central Bank President Jean-Claude Trichet indicated his willingness to sanction bond rollovers in Greece, helping tame concern the global economic recovery is faltering.

Mazda Motor Corp., the Japanese automaker that gets about 18 percent of sales from Europe, added 1 percent. Toyota Motor Corp. climbed 2.2 percent as the company plants announce earnings forecasts this week, boosting confidence that the world’s No. 1 carmaker is recovering after production was disrupted after the March earthquake. Macquarie Group Ltd., Australia’s biggest investment bank, sank 2.1 percent after Citigroup Inc. recommended investors sell the stock.

The MSCI Asia Pacific Index gained 0.1 percent to 133.70 as of 7:32 p.m. in Tokyo, erasing a loss of as much as 0.4 percent. Five stocks climbed for every four that retreated in the gauge. About $320 billion has been erased from the market value of the measure since the year’s peak on May 2 amid disappointing economic data, capped by last week’s U.S. jobs report.

“We seem to be seeing a global synchronized slowdown,” Daphne Roth, Singapore-based head of Asian equity research ABN- Amro Private Bank, said on Bloomberg Television. “Asian markets are pretty cheap now. We may wait for a couple months until we can see some direction and that will be a good entry point.”

The MSCI Asia Pacific gauge slid 3 percent this year through yesterday, compared with a gain of 2.3 percent by the S&P 500 and a drop of 1.3 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings on average, compared with 13 times for the S&P 500 and 11 times for the Stoxx 600.

Regional Indexes

Australia’s S&P/ASX 200 Index slid 0.1 percent, paring losses of as much as 0.8 percent. The Reserve Bank of Australia left its benchmark interest rate unchanged for a sixth straight meeting as signs of moderating employment growth indicate inflation will stay contained. The nation’s currency declined.

South Korea’s Kospi Index dropped 0.7 percent. Hong Kong’s Hang Seng Index decreased 0.4 percent. China’s Shanghai Composite Index added 0.6 percent.

Japan’s Nikkei 225 Stock Average climbed 0.7 percent after swinging between gains and losses at least 10 times. Tokyo Electric Co., the owner of the Fukushima Dai-Ichi nuclear plant crippled by the March earthquake and tsunami, rebounded from a record low after the Japanese government said liquidating the utility would cause problems and must be avoided.

The MSCI Asia Pacific Index last week capped its longest streak of weekly losses since the collapse of Lehman Brothers Holdings Inc. in 2008 as reports showed manufacturing growth from China, the U.S. and Europe slowed in May, adding to signs that momentum is weakening in a global economy facing headwinds from rising commodity costs and financial shocks.

‘Emerge Stronger’

ECB’s Trichet gave his first signal endorsing measures to encourage investors to buy new Greek bonds to replace maturing securities as officials seek to stem the nation’s debt crisis. German Chancellor Angela Merkel told President Barack Obama the euro region will overcome its debt crisis and “emerge strengthened,” Steffen Seibert, Merkel’s chief spokesman, said after the two leaders met in Washington.

Mazda Corp., the Japanese carmaker that relies on Europe the most, increased 1 percent to 198 yen in Tokyo. HTC Corp., the Taiwanese maker of smartphones that counts Europe as its second-biggest source of revenue, climbed 3.6 percent to NT$1,285 in Taipei. Billabong International Ltd., the world’s biggest surfwear maker that gets 23 percent of sales from Europe, added 0.7 percent to A$6.12 in Sydney.

Futures on the Standard & Poor’s 500 Index advanced 0.6 percent today. In New York yesterday, the index retreated 1.1 percent to the lowest level since March 18, falling for a fourth day amid concern economic growth is slowing and the Federal Reserve will boost capital requirements for the nation’s largest banks.

Toyota, Tepco Rallies

Toyota climbed 2.2 percent to 3,285 yen in Tokyo. The company said it will announce full-year earnings forecasts for the year ending in March 2012 on June 10 in Tokyo. The carmaker has delayed the announcement because supply chain disruptions from the quake have made it difficult to predict production levels.

Tokyo Electric gained 4.4 percent to 216 yen, after plunging 28 percent to a record low yesterday. Tepco, as the utility company is known, rebounded Chief Cabinet Secretary Yukio Edano said the power company’s liquidation should be avoided to protect victims of the disaster entitled to compensation. Edano was responding to comments yesterday by Tokyo Stock Exchange President Atsushi Saito, who said Tokyo Electric should be put into bankruptcy protection.

Hacker Attacks

Sony Corp., the maker of PlayStation gaming consoles and Bravia televisions, dropped 1.5 percent to 2,031 yen in Tokyo, heading for its fourth day of decline. Sony said its Brazilian website was attacked by cyber intruders two days after hackers broke in to its European site. Hacker attacks since April that had compromised more than 100 million customer accounts may cost the company 14 billion yen ($175 million).

Canon Inc., the world’s largest maker of cameras, slumped 2.6 percent to 3,745 yen after announcing it completed a 50 billion yen stock buyback.

Macquarie sank 2.1 percent to A$32 in Sydney after Citigroup lowered its rating to “sell” from “hold,” saying, Australia’s biggest investment bank is falling behind rivals in generating fees for mergers and acquisitions.

--With assistance from Norie Kuboyama and Toshiro Hasegawa in Tokyo. Editor: Nick Gentle, John McCluskey.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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