Bloomberg News

Japanese, Australian Stock Futures Gain on Europe Optimism

September 26, 2011

Sept. 27 (Bloomberg) -- Japanese and Australian stock futures gained on expectations European leaders will act to prevent the region’s sovereign-debt crisis from getting worse.

American depositary receipts of Sumitomo Mitsui Financial Group Inc., Japan’s No. 2 bank by market value, advanced 1.2 percent from the closing share price in Tokyo after the European Central Bank was said to consider restarting covered-bond purchases along with further measures to ease monetary conditions. Those of Canon Inc., which depends on Europe for about a third of its sales, climbed 1.3 percent. ADRs of BHP Billiton Ltd., Australia’s No. 1 oil producer, jumped 3.6 percent after crude prices advanced.

“Speculation that Europe may take additional monetary easing measures will likely boost shares” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “A rebound in stocks will be limited as U.S. employment and other significant economic reports are scheduled to be released next week.”

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,465 in Chicago yesterday, compared with 8,290 in Osaka, Japan. They were bid in the pre-market at 8,450 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index gained 2.7 percent today. New Zealand’s NZX 50 Index rose 0.8 percent in Wellington.

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. In New York, the index climbed 2.3 percent yesterday, with all 10 groups in the gauge advancing, after a euro-region central bank official said ECB policy makers are likely to debate next week suggest resuming buying bonds from banks that are backed by loans as collateral.

Interest Rates

The reintroduction of 12-month loans to banks will also be discussed at the ECB’s Oct. 6 policy meeting, said the person, who spoke on condition of anonymity because the information is confidential. Interest-rate cuts are likely to be discussed, though they are not on the agenda, the official said. A spokesman for the Frankfurt-based ECB declined to comment.

The euro gained to as much as 103.45 yen today in Tokyo, compared with 102.18 at the close of stock trading yesterday. A stronger euro boosts the value of European income at Japanese companies when converted into their home currency.

The S&P 500 fell earlier yesterday as figures from the Commerce Department showed that purchases of new houses in the U.S. declined in August to a six-month low as the biggest drop in prices in two years failed to lure buyers away from even less expensive distressed properties.

Crude oil for November delivery rose 39 cents to settle at $80.24 a barrel yesterday in New York, the first increase in four sessions. Copper futures for December delivery yesterday advanced for the first time in three sessions.

The MSCI Asia Pacific Index declined 21 percent this year through Sept. 23, compared with a 7.5 percent drop by the S&P 500 and a 20 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 11.1 times estimated earnings on average, compared with 11.7 times for the S&P 500 and 9.2 times for the Stoxx 600.

--Editors: John McCluskey, Jason Clenfield

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net;

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


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