Australian equities headed for a weekly advance after U.S. manufacturing rose and jobless claims dropped, adding to signs the world’s biggest economy is recovering. Japanese stock futures fell as the yen rebounded and a technical indicator showed signs of overheating.
Australia & New Zealand Banking Group Ltd. (ANZ), Australia’s third-largest lender, rose 0.4 percent. American depositary receipts of Honda Motor Co. (7267), Japan’s second largest carmaker by market value, slid 0.6 percent from the closing share price in Tokyo. ADRs of Hitachi Ltd. (6501) rose 1 percent after the maker of electronic equipment and machinery boosted its net-income forecast.
Australia’s S&P/ASX 200 Index rose 0.1 percent today, set for a 1.6 percent gain this week. New Zealand’s NZX 50 Index rose 0.2 percent in Wellington. Futures on Japan’s Nikkei 225 Stock Average (NKY) expiring in June closed at 10,025 in Chicago yesterday, down from 10,060 in Osaka, Japan. They were bid in the pre-market at 10,030 in Osaka at 8:05 a.m. local time.
“It looks like we are moving into the start of a more favorable upward spiral,” said Angus Gluskie, who manages more than $350 million at White Funds Management in Sydney. “We spend a lot of time monitoring U.S. data and the way it’s developing positively over the past few months is very encouraging for an overall outlook for global economic activity and prospects of listed companies.”
Manufacturing, Jobless Claims
Futures on the Standard & Poor’s 500 Index (SPXL1) fell 0.1 percent today. The index gained 0.6 percent in New York yesterday, rising above 1,400 for the first time in almost four years. Manufacturing (EMPRGBCI) in the New York region expanded in March at the fastest pace since June 2010, a report showed. Claims for jobless benefits fell last week, matching the lowest level in four years.
Japanese stock futures fell after the 14-day relative strength index for the Nikkei 225 Stock Average rose to 78, above the 70 threshold that some traders see as a sign the market has been overbought and may fall.
The yen rose 0.2 percent to 83.57 per dollar yesterday, when it touched 84.18, the lowest level since April 13. A stronger yen decreases the value of Japanese exporters’ overseas income when repatriated.
“A downtrend in the yen is taking a pause, and chances are stocks will have a correction today following a rapid rally,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Still, the market remains in a mid-term uptrend with expectations mounting about earnings in the next fiscal year. The Nikkei is likely to stay above 10,000.”
The MSCI Asia Pacific Index (MXAP) gained 12.3 percent this year through yesterday, compared with an 11.5 percent advance by the S&P 500 and a 10.8 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 15.1 times estimated earnings on average, compared with 13.5 times for the S&P 500 and 11.3 times for the Stoxx 600.
The Bloomberg China-US 55 Index of the most-traded Chinese companies in the U.S. rose 0.6 percent to 104.85 yesterday, led by New Oriental Education & Technology Group Inc., China’s largest private education service provider.
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