Bloomberg News

Asian Stocks Rise for Second Day on Prospect of Greece Debt Deal

June 29, 2011

June 29 (Bloomberg) -- Asian stocks rose, with the key regional index headed for its highest close in three weeks, amid signs Greece may avoid defaulting on its debt, lessening a risk to bank earnings, and after commodities gained.

Standard Chartered Plc., the U.K.’s third-largest bank by market value, gained 2 percent in Hong Kong on speculation Greek lawmakers will pass budget cuts needed to secure international financial aid. BHP Billiton Ltd., the world’s No. 1 mining company, jumped 1.8 percent after oil and metal prices climbed. Fanuc Corp., Japan’s biggest maker of industrial robots, advanced 3.6 percent in Tokyo after the nation’s factory output expanded at the fastest pace in more than 50 years.

“There’s less anxiety about the issues surrounding Greece’s debt,” said Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc. in Tokyo. “Investors are starting to move into riskier assets.”

The MSCI Asia Pacific Index climbed 1.3 percent to 133.04 as of 7:27 p.m. in Tokyo, headed for its highest close since June 8. Almost four stocks rose for each that dropped on the measure. The gauge tumbled 6.7 percent from this year’s high on May 2 through yesterday, amid concern a slowing U.S. economy, Europe’s sovereign debt crisis and China’s steps to curb inflation will crimp earnings.

Greek Rescue

Japan’s Nikkei 225 Stock Average and South Korea’s Kospi Index increased 1.5 percent. Australia’s S&P/ASX 200 Index advanced 1.2 percent. Hong Kong’s Hang Seng Index was little changed after swinging between gains and losses and China’s Shanghai Composite Index lost 1.1 percent.

Futures on the Standard & Poor’s 500 Index climbed 0.2 percent today. The gauge advanced 1.3 percent yesterday in New York, rising to its highest level in three weeks, after Nike Inc.’s earnings beat estimates and amid optimism Europe will take action to prevent a Greek default.

Stocks extended gains ahead of a meeting in Berlin today between the German Finance Ministry and the nation’s biggest banks in search of an agreement on how creditors will contribute to an aid package for Greece, two people with knowledge of the matter told Bloomberg. Greek lawmakers will vote today and tomorrow on budget cuts and tax increases that European officials have set as a condition for delivering bailout money.

Failure to resolve the crisis in Greece, which needs loans from Europe and the International Monetary fund to cover 6.6 billion euros ($9.4 billion) of maturing bonds in August, may further increase funding costs for banks, even when they don’t own Greek bonds.

Lenders, Exporters Rise

Standard Chartered, a London-based bank that gets more than half of revenue in the Asia Pacific, rose 2 percent to HK$198.30 in Hong Kong. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank, advanced 1.1 percent to 382 yen.

Commonwealth Bank of Australia, the nation’s biggest lender by market value, added 1.1 percent to A$51.37. Moody’s Investors Services last month cut ratings for Australian banks because of their reliance on debt markets for funding.

Exporters to Europe rebounded. Canon Inc., the world’s biggest camera maker by sales, advanced 2.1 percent to 3,820 yen in Tokyo. Nintendo Co., which sells about a third of its Wii game consoles and other products in Europe, rose 1.5 percent to 15,160 yen. Esprit Holdings Ltd., a Hong Kong-based clothier that counts Europe as its main market, increased 2.6 percent to HK$24.05 in Hong Kong.

Bosideng Surges

Bosideng International Holdings Ltd., which sells jackets in China, surged 14 percent to HK$2.45 in Hong Kong, the biggest advance on the MSCI Asia Pacific Index. The company said full- year net income increased 18 percent from a year earlier to 1.28 billion yuan ($198 million).

Yue Yuen Industrial Holding Ltd., a maker of athletic shoes that supplies Nike, climbed 1.4 percent to HK$25 in Hong Kong. Nike yesterday said fourth-quarter net income rose 14 percent from a year earlier to $594 million, or $1.24 a share. That beat the $1.17 average estimate in a Bloomberg survey of analysts.

Raw material producers led gains by all 10 industry groups on the benchmark regional index after rising crude oil and metal prices boosted earnings prospects for miners and energy explorers.

BHP Billiton increased 1.8 percent to A$43.15 in Sydney. Rio Tinto Group, the world’s second-biggest mining company by sales, gained 1.5 percent to A$81.53. Inpex Corp., Japan’s largest energy explorer, rose 2.1 percent to 589,000 yen in Tokyo. Cnooc Ltd., China’s No 1. offshore oil producer, climbed 1.7 percent HK$17.84 in Hong Kong.

Oil, Metals

Crude oil for August delivery rose 2.5 percent yesterday, the biggest advance in almost six weeks. The London Metal Exchange Index of prices for six metals including copper and aluminum climbed 1.1 percent.

The MSCI Asian gauge lost 4.6 percent this year through yesterday, compared with a gain of 3.1 percent by the S&P 500 and a drop of 3.8 percent the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 10.8 times for the Stoxx 600.

Japanese manufacturers and utilities advanced after government data showed factory output increased 5.7 percent in May from April, the biggest gain since 1953, as companies reopened factory lines damaged by a record earthquake and tsunami on March 11. The median estimate of economists surveyed by Bloomberg was for a 5.5 percent gain.

Japan Quake

Fanuc surged 3.6 percent to 13,430 yen. Toyota Motor Corp., whose sales plunged 33 percent because of supply-chain disruptions after the March temblor, gained 1.7 percent to 3,270 yen. Aisin Seiki Co., which supplies parts to Toyota, climbed 2.5 percent to 3,085 yen.

Tokyo Electric Power Co., operator of the Fukushima Dai- Ichi plant crippled by the disaster, rose 2.9 percent to 325 yen after the utility’s shareholders voted not to abandon the nuclear power business.

Among stocks that declined, CJ CheilJedang Corp., South Korea’s largest food manufacturer by market value, dropped 6.4 percent to 234,000 won, the steepest fall on the MSCI Asia Pacific Index, amid concern it’s paying too much for a stake in Korea Express Co., the nation’s biggest logistics company.

CJ Cheiljedang and CJ Corp. are set to buy about 40 percent of Korea Express after beating out a rival offer from a Posco- Samsung Group venture. The partners bid about 2 trillion won ($1.86 billion), Korea Economic Daily reported, without saying how it got the information. That’s more than double the market value of the stake in the logistics company.

--With assistance from Akiko Ikeda in Tokyo. Editors: Jason Clenfield, Sam Waite

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net. undefined -0- Jun/29/2011 10:34 GMT


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