Bloomberg News

Asian Stocks Rise for Fourth Day on Greece Vote, U.S. Economy

July 01, 2011

July 1 (Bloomberg) -- Asian stocks rose, sending the regional benchmark index to its longest winning-streak since February, on optimism Greece will avoid default and after U.S. manufacturing unexpectedly expanded at a faster pace in June, lessening risk for bank earnings and exports.

Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, rose 2.1 percent in Tokyo. Samsung Electronics Co., an electronics maker that gets about 42 percent of sales from the U.S. and Europe, increased 3.5 percent in Seoul. Fanuc Corp., Japan’s biggest maker of industrial robots, jumped 5.5 percent after a report showed a surge in orders.

“The most negative fears about global growth have been soothed in the past 24 hours,” said Stephen Halmarick, Sydney- based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “Events in the U.S. and Greece were weighing on global growth expectations and risk appetite, but the U.S. data was reasonable and Greece has passed a major hurdle.”

The MSCI Asia Pacific Index gained 0.5 percent to 135.59, as of 7:13 p.m. in Tokyo, set for its highest close since June 1. Three stocks rose for every two that dropped on the measure. Through yesterday, the gauge tumbled 4.2 percent from this year’s high on May 2, amid concern a slowing U.S. economy, Europe’s sovereign debt crisis and China’s steps to curb inflation will crimp earnings.

China, Japan Data

Japan’s Nikkei 225 Stock Average gained 0.5 percent after the country’s largest companies said they plan to boost capital spending this fiscal year at almost twice the pace forecast by economists. South Korea’s Kospi Index climbed 1.2 percent. Australia’s S&P/ASX 200 Index lost 0.4 percent.

China’s Shanghai Composite Index fell 0.1 percent after an index of Chinese manufacturing dropped to the lowest level since February 2009 in June, indicating Premier Wen Jiabao’s campaign to tame inflation has damped growth in the world’s second- biggest economy. Markets in Hong Kong are closed for a holiday.

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. The index advanced 1 percent yesterday after Greek lawmakers passed an austerity plan required to keep rescue aid flowing.

Stocks rose across the region this week, with the benchmark MSCI Asia Pacific Index headed for a 2.6 percent gain, as Euro- area finance ministers moved closer to giving Greece another bailout and German banks agreed to roll over their Greek bond holdings, giving the country more time to pay its debts.

German Rollover

Shares of financial companies advanced amid speculation a resolution to the Greek crisis would help lower costs for banks relying on debt markets for funding. Mitsubishi UFJ gained 2.1 percent to 398 yen in Tokyo. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest publicly traded bank by market value, increased 1.3 percent to 2,500 yen.

Exporters climbed after a gauge of U.S. manufacturing unexpectedly improved and confidence among consumers in the world’s biggest economy rose to the highest level in 10 weeks. Samsung Electronics, the second-largest maker of mobile phones by sales, climbed 3.5 percent to 855,000 won in Seoul. Toyota Motor Corp., the No. 1 carmaker, added 1.1 percent to 3,335 yen in Tokyo.

Fanuc jumped 5.5 percent to 14,110 yen. Orders at the maker of factory automation tools rose to a record in the three months ended March 31, increasing 14 percent from the previous quarter, according to a report by Nomura Holdings Inc. Demand for industrial robots in the U.S. and Europe drove the growth, the report said.

Japanese stocks increased after the Bank of Japan’s quarterly Tankan survey showed large companies plan to increase hiring and investment as demand rebounds this year from a March earthquake. The survey, the first to fully reflect the impact of the disaster, also showed sentiment among big manufacturers fell last quarter the most since 2009.

‘On Track’

HTC Corp., a Taiwanese smartphone manufacturer that gets about half its sales from America, increased 4.6 percent to NT$1,010. The maker of handsets that run Google Inc.’s Android operating system yesterday said it’s “on track” to meet its second-quarter guidance. Shares fell earlier this week amid speculation the company would miss a shipment target.

PT Astra International, Indonesia’s biggest automotive retailer by sales, climbed 3.2 percent to 65,550 rupiah in Jakarta after CLSA Asia-Pacific Markets reiterated its “buy” rating on the stock, saying earnings will be boosted by rising demand for cars in the country.

Among stocks that declined, Lynas Corp., an Australian rare earth miner, slumped 12 percent to A$1.75 after Malaysia imposed extra safety conditions that have delayed work on a refinery it’s building in the Southeast Asian country.

The company will meet the requirements, Chief Executive Officer Nicholas Curtis told reporters in Kuala Lumpur yesterday, adding that the refinery may be commissioned by the end of this year and be in production by the second half of 2012. Lynas had planned to complete the plant in September, it said on June 20.

The MSCI Asia Pacific Index lost 2 percent this year through yesterday, compared with a gain of 5 percent by the S&P 500 and a drop of 1.1 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.8 times estimated earnings on average, compared with 13.4 times for the S&P 500 and 11.1 times for the Stoxx 600.

--With assistance from Akiko Ikeda and Satoshi Kawano in Tokyo. Editors: Jason Clenfield, Nick Gentle

Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

-0- Jul/01/2011 10:15 GMT

To contact the reporters on this story:

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


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