Sept. 28 (Bloomberg) -- Most Asian stocks advanced after Greece made progress in meeting requirements for additional international aid and Germany vowed continued support for the debt-laden country.
Esprit Holdings Ltd., a clothier that counts Europe as its biggest market, surged 12 percent in Hong Kong. Oki Electric Industry Co. climbed 9.2 percent in Tokyo after the Nikkei newspaper reported the electronics maker may post its first profit in seven years. CSR Corp., China’s biggest train maker, fell 1.7 percent in Shanghai on speculation the government will slow rail expansion following another accident.
The MSCI Asia Pacific Index gained 0.4 percent to 113.89 as of 5:45 p.m. in Mumbai, having dropped earlier as much 0.2 percent. About three stocks rose for every two that fell in the gauge. The measure slumped 7.1 percent last week, the most in almost three years, on concern the global economy is set for a recession. The declines drove the index into a so-called bear market after falling more than 20 percent from a May 2 high.
“It’s looking more likely that Greece will get support,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd. “Policy makers have been pushed to act because Europe’s situation has gotten so bad. That’s given stocks a little lift, but if real progress isn’t made, we could see markets go right back down again.”
Nikkei, Hang Seng
Japan’s Nikkei 225 Stock Average added 0.1 percent. The broader Topix advanced 0.7 percent even as 921 of the 1,664 companies in the measure went ex-dividend today.
Australia’s S&P/ASX 200 Index jumped 0.9 percent. China’s Shanghai Composite Index dropped 1 percent. Hong Kong’s Hang Seng Index and South Korea’s Kospi Index fell 0.7 percent.
Futures on the Standard & Poor’s 500 Index gained 0.3 percent, having swung between gains and losses of 0.6 percent. The index climbed 1.1 percent yesterday in New York, extending its three-day advance to 4.1 percent, on optimism Europe is close to an agreement to contain its debt crisis.
German Chancellor Angela Merkel said Greece is ready to fulfill the conditions laid down by the so-called troika assessing Greek progress at meeting the terms of its international rescue. Greek Prime Minister George Papandreou won parliamentary backing for a property tax to meet deficit- reduction targets required to avoid default.
U.S. stocks trimmed gains yesterday in the final hour of trading after the Financial Times reported that some euro-area countries are demanding private creditors accept a bigger writedown on their Greek bond holdings.
Esprit surged 12 percent to HK$9.55 in Hong Kong. Cosco Pacific Ltd., which operates container facilities at Greece’s Piraeus port, jumped 6.5 percent to HK$8.80. Standard Chartered Plc, the U.K.’s third-biggest lender by market value, rose 2 percent to HK$162.
The biggest three-day rally in a month for the Standard & Poor’s 500 Index is failing to convince U.S. options traders to lower their guard against more losses. Futures on the VIX show investors expect the Chicago Board Options Exchange Volatility Index to remain at least 50 percent above its historical average of 20.5 through May, data compiled by Bloomberg show.
“It seems that investors remain cautious about the European debt crisis,” said Ben Kwong, chief operating officer at KGI Asia Ltd. “Investors here are not fully convinced that the crisis is over, and they believe the market could test another bottom because of prevailing concerns of the global economic slowdown and the debt crisis of developed economies.”
Commerce Department data due out today may show U.S. durable goods orders fell. Separate reports confirmed France’s economy stalled last quarter and showed confidence among U.S. consumers stagnated in September near a two-year low.
The MSCI Asia Pacific Index declined 18 percent this year through yesterday, compared with a 6.5 percent drop by the S&P 500 and a 17 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 11.6 times estimated earnings on average, compared with 11.8 times for the S&P 500 and 9.7 times for the Stoxx 600.
Oki Electric surged 9.2 percent to 71 yen. The electronics maker may report an operating profit of as much as 1 billion yen ($13 million) for the six-month period ending in September, the first profit in seven years, the Nikkei newspaper reported, citing rising sales of automatic teller machines in China.
Daikin Industries rose 2.8 percent to 2,243 yen. Operating profit for the fiscal year ending March 31 may rise to 90 billion yen, compared with a previous forecast of 85 billion yen, because of stronger-than-expected demand for high-margin air conditioners in China, Noriyuki Inoue, the company’s chairman, said yesterday in Osaka.
China’s rail-related stocks declined after a Shanghai subway train rammed into the back of another locomotive yesterday, sparking speculation the government will slow the nation’s rail expansion. The country slashed rail construction since 40 people were killed in a high-speed crash in July.
“This is an alarm bell for the subway system after years of rapid growth,” said Jack Xu, an analyst at Sinopac Securities Asia Ltd. in Shanghai. “Investment in the sector may slow in the near term.”
CSR Corp., which supplied subway trains for lines in Shanghai, Nanjing and Guangzhou, fell 1.7 percent to 4.64 yuan in Shanghai. China Railway Group Ltd., the nation’s biggest builder of train lines, slipped 1 percent to HK$2.99.
--With assistance from Kana Nishizawa and Anna Kitanaka in Tokyo, Susan Li in Hong Kong and Shikhar Balwani in Mumbai. Editors: Nick Gentle, Jason Clenfield.
To contact the reporters on this story: Jonathan Burgos in Singapore at firstname.lastname@example.org; Norie Kuboyama in Tokyo at email@example.com
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