Bloomberg News

Asian Stocks Gain for Record-Extending 11th Week on U.S., Europe Optimism

March 02, 2012

Asian stocks rose, with the regional benchmark index extending its longest weekly winning streak on record, after better-than-expected global economic data overcame concern the U.S. and China may not introduce further stimulus.

Canon Inc. (7751), a camera maker that gets 27 percent of its sales in the Americas, rose 3.2 percent in Tokyo. China Overseas Land & Investment Ltd. (688) led mainland developers lower after home prices declined. Esprit Holdings Ltd. (330), a Hong Kong-based clothier that counts Europe as its biggest market, added 8.3 percent as concern eased over the debt crisis. Hynix Semiconductor Inc. (000660) advanced 5.6 percent in Seoul after the bankruptcy filing of rival Elpida Memory Inc. (6665), which tumbled 98 percent.

The MSCI Asia Pacific Index climbed 0.2 percent to 128.22, capping an 11-week advance, the longest such streak since its inception in 1988. The measure entered a bull market on Feb. 29, gaining more than 20 percent from an Oct. 5 low, after U.S. economic optimism and monetary easing in Europe, Japan and China fueled the fastest rally in more than two years.

“The bull-market signs are broadening amid resilience in the U.S. economy,” said Nader Naeimi, a Sydney-based senior strategist at AMP Capital Investors Ltd., which manages almost $100 billion. “Investor sentiment has gone from extreme pessimism to one of optimism. Europe didn’t turn out as bad as the market was fearing because of the actions taken by the European Central Bank.”

ECB Loans

Stocks have rallied all over the world after the ECB offered unlimited three-year loans to euro-area financial institutions at the end of last year and on Feb. 29. The two operations have driven down borrowing costs and eased debt- crisis concerns.

The MSCI Asia Pacific Index (MXAP) gained 12.6 percent this year through yesterday, compared with an 8.9 percent advance by the S&P 500 and a 9.3 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.8 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 11.1 times for the Stoxx 600.

The 14-day relative strength index for the MSCI Asia Pacific Index rose to 68 on Feb. 29, nearing the 70 threshold that may indicate the market has been overbought.

Japan’s Nikkei 225 Stock Average (NKY) added 1.3 percent this week as the yen touched a nine-month low against the dollar. A measure of the nation’s smaller stocks on Feb. 28 ended its record streak of gains after advancing for 30 days. The nation’s industrial production rose more than expected in January.

Factory Output

South Korea’s Kospi (KOSPI) Index rose 0.7 percent after the country’s factory output increased in January. Australia’s S&P/ASX 200 Index fell 0.8 percent. Hong Kong’s Hang Seng Index gained 0.7 percent. The Shanghai Composite Index, which tracks the larger of China’s stock exchanges, advanced 0.9 percent this week.

Stocks climbed after reports showed the U.S. economy expanded more than forecast, business activity accelerated and consumer confidence rose. Initial filings for jobless benefits fell to a four-year low.

Yue Yuen Industrial Holdings Ltd. (551), which makes shoes for Nike Inc., added 5.3 percent to HK$27. Canon rose 3.2 percent to 3,730 yen. Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, added 0.2 percent to 1.18 million won.

No Stimulus Signals

Gains were limited after Federal Reserve Chairman Ben S. Bernanke on Feb. 29 gave no indication of more stimulus measures. Shares in Hong Kong and Shanghai slipped after China’s manufacturing improved for a third month in February, damping expectations for relaxing policy.

“As the U.S. economy continues to recover and with China’s manufacturing still expanding, there’s less likelihood of further monetary easing,” said Castor Pang, head of research at Core-Pacific Yamaichi International Ltd.

China Overseas Land & Investment slid 3.3 percent to HK$15.86 as mainland home prices fell in February the most in 19 months, according to SouFun Holdings Ltd., operator of the nation’s largest real estate website.

Country Garden Holdings Company Ltd. (2007) fell after saying it would sell shares at a discount. The developer slumped 7.2 percent to HK$3.33.

Exporters to Europe rose after Greece’s parliament ratified a 3.2 billion-euro ($4.3 billion) package of spending cuts, bringing the nation a step closer to securing a debt bailout.

Esprit rallied 8.3 percent to HK$19.26, and Cosco Pacific Ltd. (1199), which operates container facilities at Greece’s Piraeus port, added 2.4 percent to HK$11.86 in Hong Kong.

The chip industry was shaken this week after Elpida, Japan’s only maker of computer memory, filed for Japan’s biggest bankruptcy in two years. Hynix Semiconductor increased 5.6 percent to 30,450 won in Seoul. Powertech Technology Inc. dropped 19 percent to NT$58.7. The circuit tester has NT$4.5 billion ($153 million) in accounts receivable with Elpida, which plunged 98 percent to 5 yen.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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


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