Bloomberg News

Asian Stocks Swing Between Gains, Losses on Europe Debt Concern

January 23, 2012

Jan. 23 (Bloomberg) -- Asian stocks swung between gains and losses as increasing home sales in the U.S. added to signs the world’s biggest economy is recovering, outweighing uncertainties over continuing debt negotiations in Greece.

Canon Inc., the Japanese camera maker that gets a third of its sales from Europe, fell 1 percent in Tokyo. Reliance Industries Ltd., India’s biggest company by market value, sank 2.9 percent in Mumbai after earnings dropped for the first time in two years. Olympus Corp., the world’s No. 1 maker of endoscopes, jumped 8.2 percent after it was allowed to keep its stock market listing following an accounting fraud that cut the company’s market value by about $4 billion.

“The market could come under short-term pressure as it’s had a strong run this year,” said Nader Naeimi, a Sydney-based senior strategist at AMP Capital Investors Ltd., which manages almost $100 billion. “Any weakness is a good buying opportunity given improving economic data out of the U.S. Greece can go hot and cold very quickly. Greece defaulting is still a possibility.”

The MSCI Asia Pacific Index rose 0.1 percent to 120.83 as as of 1:55 p.m. in Tokyo, having swung between gains and losses at least seven times. About the same number of shares rose and fell in the measure. The gauge completed its longest streak of weekly gains last week in a year as U.S. reports showed the world’s biggest economy is recovering and falling European borrowing costs signaled the debt crisis may be easing.

Japan’s Nikkei 225 Stock Average gained 0.1 percent, reversing losses of as much as 0.3 percent. India’s BSE Sensitive Index added 0.1 percent. Australia’s S&P/ASX 200 Index lost 0.3 percent. Markets in China, Hong Kong, Indonesia, Malaysia, Philippines, South Korea, Singapore and Taiwan are closed today for holidays.

Greek Talks

Futures on the Standard & Poor’s 500 Index slipped 0.3 percent today. The gauge added 0.1 percent in New York on Jan. 20, erasing a loss in the final minutes of trading, as banks gained and results from International Business Machines Corp. and Intel Corp. boosted technology shares.

Companies that receive revenue from Europe declined before a European Union meeting today aimed at crafting a long-term plan to tackle the region’s debt crisis as banking and government negotiators continue trying to reach an agreement that will lighten Greece’s debt burden.

Canon dropped 1 percent to 3,390 yen in Tokyo. Shimano Inc., the bicycle parts maker that counts Europe as its biggest market, fell 1.5 percent to 3,670 yen.

Mitsubishi Tanabe Pharma Corp., discoverer of the multiple sclerosis treatment Gilenya, plunged 7.8 percent to 1,064 yen, heading for the lowest close since November 2009, after European and U.S. regulators said they are reviewing the safety of the medicine.

Indian Earnings

Reliance Industries slipped 2.9 percent to 769.85 rupees in Mumbai after the owner of the world’s biggest oil refining complex said third-quarter net income declined 14 percent from a year earlier to to 44.4 billion rupees ($884 million). That missed the 45.6 billion rupee median estimate of 29 analysts surveyed by Bloomberg.

United Spirits Ltd., India’s second-largest liquor maker by market value, decreased 4.1 percent to 597.5 rupees after reporting third-quarter net income dropped to 470.6 million rupees from 1.3 billion rupees a year earlier. JPMorgan Chase & Co. downgraded its rating on the stock to “neutral” from “overweight.”

Home Sales

Exporters to the U.S. advanced as sales of previously owned American homes rose for a third month in December to the highest level since January 2011, a sign the housing market ended last year with momentum.

Honda Motor Co., the carmaker that gets about 44 percent of sales from North America, added 0.6 percent to 2,675 yen in Tokyo. Sony Corp., the maker of Bravia televisions and PlayStations game consoles, jumped 4.8 percent to 432 yen. Billabong International Ltd, the surfwear maker that counts the Americas as its biggest market, surged 7 percent to A$1.995 in Sydney.

The MSCI Asia Pacific Index gained 6 percent this year through Jan. 20, compared with gains of 4.6 percent by the S&P 500 and 4.6 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 1.3 times book value. That compares with 2.1 times for the Standard & Poor’s 500 Index in the U.S. and 1.4 times for the Europe Stoxx 600 Index in Europe.

Olympus climbed 8.2 percent to 1,298 yen in Tokyo. The company was fined 10 million yen ($130,000) and told to submit annual reports on efforts to improve management, the Tokyo Stock Exchange said on Jan. 20 after announcing the bourse operator’s decision to allow Olympus to keep its listing.

“Investors are reacting positively on the announcement,” said Mitsushige Akino, who oversees $600 million at Ichiyoshi Investment Management Co. in Tokyo. “It’s also expected that Olympus will now now be able to make progress on capital alliance talks.”

--Editors: John McCluskey, Jim Powell

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net


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