Bloomberg News

Japan Stock Futures, Australia Shares Little Changed on Europe

October 26, 2011

Oct. 27 (Bloomberg) -- Japanese stock futures rose and Australian shares were little changed after Europe reached an accord on plans to recapitalize banks, while talks with lenders on bondholder losses as part of a second Greek bailout ran aground.

American depositary receipts of Toyota Motor Corp., the world’s biggest carmaker, rose 0.8 percent from the closing share price in Tokyo as U.S. economic data beat estimates, boosting the earnings outlook for Asian exporters. Those of Hitachi Ltd., a Japanese maker of electronics, rose 0.8 percent.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,790 in Chicago yesterday, up from 8,730 in Osaka, Japan. They were bid in the pre-market at 8,770 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index was little changed before trading was halted by technical problems. New Zealand’s NZX 50 Index advanced 0.4 percent in Wellington.

Europe’s situation “is certainly clearer than we’ve had over the past few days,” said Stan Shamu, a strategist at IG Markets in Melbourne. “This does seem a little bit more positive, and we’ve also got positive economic data out of the U.S., and that did really boost sentiment.”

Bank Recapitalization

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. In New York, the index added 1.1 percent yesterday after European Union leaders reached an agreement on a plan to recapitalize banks even as talks on bondholder losses hit an impasse. The European leaders convened for the second summit in four days -- and the 14th in 21 months -- amid mounting global exasperation over their failure to extinguish the two-year-old crisis that threatens to ravage Italy and France and brake the world economy.

French President Nicolas Sarkozy and German Chancellor Angela Merkel want to meet Greek creditors in Brussels to break a deadlock of the terms of a debt writedown, said a person familiar with the matter. Sarkozy plans to call Chinese leader Hu Jintao today to discuss China contributing to a fund European leaders may set up to bolster its debt-crisis fight, according to a person familiar with the matter.

Stocks also gained after orders for U.S. durable goods excluding transportation equipment rose in September by the most in six months. Another report showed purchases of new houses increased more than forecast in September as discounted prices lured buyers in some parts of the country.

The MSCI Asia Pacific Index declined 13 percent this year through yesterday, compared with a 1.2 percent drop by the S&P 500 and a 13 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.1 times estimated earnings on average, compared with 12.5 times for the S&P 500 and 10.4 times for the Stoxx 600.

--Editors: John McCluskey, Jason Clenfield

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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


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