Bloomberg News

Asia Stocks Hold Five-Month High as Greece Weighs Global Outlook

February 07, 2012

Feb. 7 (Bloomberg) -- Asian stocks rose, with the regional benchmark index trading near a five month high, as Greek lawmakers worked to secure a bailout amid warnings Europe’s crisis threatens global demand.

Japan Tobacco Inc. paced advancing shares after the company raised its earnings forecast. Cochlear Ltd., maker of the world’s top-selling ear implant, rose the most in seven weeks in Sydney trading after posting a narrower-than-estimated first- half loss. Chinese stocks dropped as the Ministry of Industry and Information Technology said the world’s second-largest economy faces more uncertainty at home and abroad.

The MSCI Asia Pacific Index rose 0.2 percent to 125.13 at 5:44 p.m. in Tokyo after falling as much as 0.2 percent and rising as much as 0.3 percent. Hong Kong’s Hang Seng Index slipped 0.1 percent while Japan’s Nikkei 225 Stock Average retreated 0.1 percent at the close. The broader Topix Index advanced 0.4 percent.

“Things aren’t great but it’s getting better,” said Angus Gluskie, who oversees about $350 million as managing director at White Funds Management in Sydney. “Investors have been very pessimistic about Europe and we are starting to see some small incremental positives. Greece is reasonably critical for the market, at this stage we all think they will come up with some sort of agreement.”

In Australia, the S&P/ASX 200 Index fell 0.5 percent after the nation’s central bank unexpectedly kept its benchmark interest rate unchanged. South Korea’s Kospi Index climbed 0.4 percent today.

Negotiations

Greek Prime Minister Lucas Papademos began a second round of negotiations with international creditors in Athens to stave off default as political leaders waver on budget measures. The country still needs to detail 600 million euros ($787 million) of fiscal measures for 2012, a government official said in Athens yesterday.

Japan Tobacco gained 5.5 percent to 406,500 yen in Tokyo after the company raised its annual profit forecast as sales recovered faster than expected after the March earthquake. Full- year revenue is expected to rise 4.4 percent.

Japanese shipping companies also advanced after the Baltic Dry Index, a gauge of cargo rates, climbed for the first time since Dec. 12. Kawasaki Kisen Kaisha Ltd. advanced 1.3 percent to 157 yen, Nippon Yusen K.K. increased 2.4 percent to 218 yen and Mitsui O.S.K. Lines Ltd. gained 2.2 percent to 329 yen.

Cochlear Ltd. jumped 7.6 percent to A$62.52 in Sydney after the maker of the world’s top-selling ear implant reported a first-half loss of A$20.4 million, smaller than analyst estimates.

China Growth Threat

Shanghai’s Composite Index fell 1.7 percent as Zhu Hongren, spokesman for the Ministry of Industry and Information Technology, told a press briefing in Beijing that China’s industrial output growth is likely to slow.

“The global economy is slowing down, Europe’s sovereign debt crisis is deepening and the downside risks to the world economy are rising with international demand still slack and global commodities and financial markets continuing to be volatile,” the ministry said in a statement issued before today’s briefing.

The comments come a day after the International Monetary Fund estimated China’s economic expansion could slow by 4 percentage points from the fund’s current projection of 8.2 percent this year should Europe’s crisis worsen.

Copper, Banks

Jiangxi Copper Co. declined 1.9 percent to HK$20.30, leading commodity producers lower as copper retreated on the London Metal Exchange.

Elsewhere, National Australia Bank Ltd. lost 4 percent to A$23.21 after Chief Executive Officer Cameron Clyne said earnings were hurt by lower lending margins and a jump in bad debts in the U.K. The bank today reported cash profit for the three months ended Dec. 31 of A$1.4 billion ($1.5 billion). That’s up 7.7 percent from a year earlier.

HTC Corp. lost 6.9 percent to NT$513 in Taiwan, the worst performer on the MSCI Asia Pacific Index, after the region’s second-largest smartphone maker forecast first-quarter revenue that missed analyst estimates as it faces tougher competition in the U.S.

Of the 291 companies in the MSCI Asia Pacific gauge that have reported earnings since Jan. 9, more than half have failed to meet analysts estimates.

--With assistance from Zheng Lifei in Beijing. Editors: John McCluskey, Jason Clenfield

To contact the reporter on this story: Sarah Jones in Sydney at sjones35@bloomberg.net

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


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