Bloomberg News

Australian Stock Futures Rise as Trichet Boosts Recovery Hopes

July 17, 2011

July 18 (Bloomberg) -- Australian stock futures rose after European Central Bank President Jean-Claude Trichet said the region can surmount its debt crisis, boosting confidence in a global recovery that would benefit Asian exporters.

BHP Billiton Ltd., the world’s biggest mining company and Australia’s No. 1 oil producer, may advance after copper prices gained in New York and London. Billabong International Ltd., the world’s largest surfwear maker that gets more than a fifth of its revenue in Europe, may also rise. Esprit Holdings Ltd., with 83 percent of its sales in Europe, may climb in Hong Kong. James Hardie Industries SE, the No. 1 seller of home siding in the U.S., may decline as concern mounted that negotiations toward raising America’s debt ceiling are failing to progress.

Futures on Australia’s S&P/ASX 200 Index rose 0.4 percent today. New Zealand’s NZX 50 Index fell 0.3 percent in Wellington after a government report showed the inflation rate was higher than economists had estimated for the second quarter. Japan’s markets are closed today for a holiday.

Futures on Standard & Poor’s 500 Index lost 0.2 percent. The gauge rose 0.6 percent on July 15 in New York, trimming its weekly loss, even as concern that a political impasse over raising the federal debt limit is putting the nation’s top credit rating in jeopardy.

House Speaker John Boehner, a Republican from Ohio, told reporters his party wouldn’t accept any tax increases as they work with President Barack Obama on a deal to lower deficits.

The ECB’s Trichet said Europe can overcome its sovereign- debt crisis.

‘Question of Will’

“Naturally the Europeans can manage the issue,” he said in an interview with the Financial Times Deutschland, according to a transcript released by the Frankfurt-based ECB. “It is not a question of technique. It is a question of will and determination.” Trichet said the euro is not in danger and remains “a highly credible currency.”

Asian commodity stocks may rise today after copper futures for September delivery increased 0.8 percent on the Comex in New York on July 15. The metal climbed 0.4 percent in London.

Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, and third-largest Santos Ltd. may gain after crude for August delivery rose 1.6 percent on the New York Mercantile Exchange on July 15.

HTC Corp., Asia’s second-biggest maker of smartphones, may advance in Taipei after saying it will buy back as much as 2.4 percent of its outstanding shares after the U.S. International Trade Commission ruled it infringed two Apple Inc. patents.

The MSCI Asia Pacific Index lost 1.5 percent this year through July 15, compared with a gain of 4.7 percent by the S&P 500 and a drop of 3.2 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 13.5 times estimated earnings on average, compared with 13.3 times for the S&P 500 and 10.7 times for the Stoxx 600.

--Editor: John McCluskey

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

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


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