Bloomberg News

Japanese Stock Futures, Australia Shares Rise on Recovery Hopes

October 12, 2011

Oct. 13 (Bloomberg) -- Japanese stock futures and Australian shares climbed as European leaders provided a road map to tame the debt crisis and the U.S. Federal Reserve said it discussed further asset purchases, spurring confidence in a global economic recovery.

American depositary receipts of Nissan Motor Co., a carmaker that gets about 80 percent of its revenue overseas, rose 1.4 percent from the closing share price in Tokyo. Those of Honda Motor Co., Japan’s second-largest automaker by revenue, gained 1.9 percent. Sony Corp. may be active today after recalling 1.6 million Bravia flat-panel TVs because a faulty component. BHP Billiton Ltd., the world’s biggest mining company, rose 1.6 percent in Sydney after metal prices rallied yesterday.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,815 in Chicago yesterday, compared with 8,740 in Osaka, Japan. They were bid in the pre-market at 8,830 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index advanced 1.1 percent today. New Zealand’s NZX 50 Index dropped 0.5 percent.

“Investor hope that Europe’s leaders can agree on a credible solution, coupled with a succession of positive days in the market, are seeing underweight equity investors forced to increase their buying,” said Angus Gluskie, who manages more than $300 million at White Funds Management in Sydney.

Debt Crisis

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The S&P 500 advanced 1 percent in New York yesterday, while the Stoxx Europe 600 Index climbed 1.7 percent to a two- month high as Olli Rehn, the European Commission’s economic and monetary affairs commissioner, said the region’s debt crisis can be resolved.

Global stocks also rose yesterday after European Commission President Jose Barroso called for a reinforcement of crisis-hit banks, the payout of a sixth loan to Greece and a faster start for a permanent rescue fund to master Europe’s debt woes. Barroso urged a “coordinated approach” to deliver a “significantly higher capital ratio of highest quality capital” for banks, while offering government funds only as a last resort.

Separately, some Federal Reserve officials last month wanted to keep further asset purchases as an option to boost the economy as policy makers saw “considerable uncertainty” that U.S. growth will pick up, the Fed said yesterday in minutes of its Sept. 20-21 meeting.

New York-traded copper futures climbed 3.1 percent yesterday, while the London Metal Exchange Index of prices for six metals including copper and aluminum gained 2.4 percent.

The MSCI Asia Pacific Index dropped 16 percent this year through yesterday, compared with a 4 percent loss by the S&P 500 and a 13 percent decline by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 11.9 times estimated earnings on average, compared with 12.1 times for the S&P 500 and 10.2 times for the Stoxx 600.

--Editors: John McCluskey, Jason Clenfield.

To contact the reporters 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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