Bloomberg News

Japan Stock Futures, Australian Shares Rise as Berlusconi Quits

November 08, 2011

Nov. 9 (Bloomberg) -- Japanese stock futures and Australian shares rose after Italian Prime Minister Silvio Berlusconi offered to resign once the government approves austerity measures, easing concern Europes’s debt crisis will damp the earnings outlook for Asian exporters.

American depositary receipts of Honda Motor Co., Japan’s second-largest carmaker by market value that gets 83 percent of its sales abroad, rose 1.8 percent from the closing share price in Tokyo. Those of Sony Corp., Japan’s No. 1 exporter of consumer electronics, advanced 1 percent. Shares of Santos Ltd., an Australian oil and gas producer, added 1.5 percent in Sydney after oil rose to a three-month high.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,760 in Chicago yesterday, up from 8,670 in Osaka, Japan. They were bid in the pre-market at 8,740 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index rose 1.2 percent today. New Zealand’s NZX 50 Index gained 0.2 percent in Wellington.

“Under the leadership of Berlusconi, some defected from the ruling party and the political situation has been chaotic,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “So-called Berlusconi risks are easing, and expectations are rising that the next government will make progress to rebuild finances. Investor sentiment has improved.”

Berlusconi’s Resignation

Futures on the Standard & Poor’s 500 Index were little changed today. In New York, the index advanced 1.2 percent yesterday as Italian President Giorgio Napolitano said Berlusconi has agreed to quit after the parliament next week approves the country’s austerity plans promised to European partners. The announcement came after Berlusconi yesterday failed to muster an absolute majority on a routine parliamentary ballot.

The MSCI Asia Pacific Index declined 13 percent this year through yesterday, compared with a 1.5 percent gain by the S&P 500 and a 13 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.9 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.4 times for the Stoxx 600.

Crude oil for December delivery rose $1.28 to $96.80 a barrel on the New York Mercantile Exchange, the highest settlement since July 28.

Shares of Olympus Corp., a Japanese optical-equipment maker, may be active today after plunging by the daily limit to 734 yen yesterday.

The Tokyo Prosecutor’s Office is investigating Olympus on suspicion the company broke securities laws, a senior official from the department said, speaking on condition he not be identified ahead of an official announcement. The Tokyo Stock Exchange Group Inc. said Japan Securities Finance Co., a provider of loans and lending services, will restrict short- selling of the shares.

--Editors: John McCluskey, Jason Clenfield

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@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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