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Asian stocks rose, with the regional benchmark index headed for its biggest gain in two weeks, after a North Korean rocket launch failed minutes after liftoff and China’s bank lending surged. Shares pared gains after the Chinese economy grew less than estimated.
Fanuc Corp. (6954), a Japanese supplier of automation equipment to mainland factories, trimmed gains after China said its economy grew at the slowest pace since 2009. Li & Fung Ltd. (494), a supplier to Wal-Mart Stores Inc., rose 2.2 percent in Hong Kong after Federal Reserve policy makers signaled U.S. interest rates will stay low. Victek (065450) Co. led declines among South Korean defense contractors after a North Korean rocket launched in defiance of international pressure broke up and fell into the sea.
The MSCI Asia Pacific Index (MXAP) gained 0.9 percent to 125.12 as of 7:30 p.m. in Tokyo, headed for its biggest increase since March 27. About three shares rose for each that fell. For the week, the measure rose 0.2 percent after Citigroup Inc. upgraded global industrial stocks, countering losses in the first three sessions amid concern Europe’s debt crisis has spread to Spain.
“North Korea is a pest we’ve gotten used to,” said Prasad Patkar, who helps oversee about $1 billion at Platypus Asset Management Ltd. in Sydney. “Markets see this as posturing rather than as a genuine threat.”
Asia’s benchmark equity gauge retreated 3.9 percent from the start of March through yesterday as China cut its economic growth target and on speculation stocks rose too fast after the index climbed 13 percent in the first two months of the year. Shares on the MSCI Asia Pacific Index are valued at an average of 12.8 times estimated earnings, compared with 13.3 on the Standard & Poor’s 500 Index and 10.7 for the Stoxx Europe 600 Index.
Shares pared gains across Asia after China’s economic growth slowed more than forecast last quarter. Gross domestic product expanded 8.1 percent from a year earlier, the least in almost three years, after an 8.9 percent gain in the previous three months, the National Bureau of Statistics said in Beijing today.
Fanuc rose 2.8 percent to 15,010 yen after earlier gaining as much as 4.3 percent. BHP Billiton Ltd. (BHP), an Australian oil producer, gained 1.7 percent to A$34.47 in Sydney after crude oil prices advanced yesterday. It pared gains as price of the commodity slid following China’s growth report.
North Korea today launched a rocket that its official news agency has since confirmed failed after liftoff. The missile, which North Korea’s government said would carry a satellite into orbit to mark the April 15 centennial of state founder Kim Il Sung, fell into the sea after breaking up, South Korean Defense Ministry spokesman Kim Min Seok said in an earlier televised briefing in Seoul.
“It’s better to have it fail than succeed,” said Masahiko Ejiri, a senior fund manager in Tokyo at Mizuho Asset Management Co., which oversees $39 billion. “Even if they do build a nuclear weapon, it doesn’t matter if they can’t make it fly.”
South Korea’s Kospi Index rose 1.1 percent. A measure of volatility among the gauge’s core stocks fell 8.3 percent, the most in a month. Australia’s S&P/ASX 200 Index climbed 1 percent.
Japan’s Nikkei 225 Stock Average rose 1.2 percent. Mitsubishi UFJ Financial Group Inc., the country’s biggest bank by market value, rose 3.6 percent to 402 yen, the biggest contributor to the Asian gauge’s advance. The lender’s trust banking arm plans to invest in a U.S. fund management firm in the next three years, President Tatsuo Wakabayashi said.
Hong Kong’s Hang Seng Index rose 1.8 percent. Shares gained after the People’s Bank of China yesterday said local-currency- denominated loans rose to the most in more than a year in March.
“China’s well-controlled policy to make banks increase lending is definitely positive for markets,” said Masahiko Ejiri, a Tokyo-based senior fund manager in Tokyo at Mizuho Asset Management Co. China’s economic figures “are unlikely to be a catalyst for selling because if the figures are bad, expectations for monetary easing will increase.”
Futures on the S&P 500 Index slipped 0.5 percent today. The gauge rose 1.4 percent in New York yesterday, capping the biggest two-day rally this year, after Federal Reserve Vice Chairman Janet Yellen and New York Fed President William C. Dudley endorsed the central bank’s view that U.S. borrowing costs are likely to remain low through 2014. Those comments overshadowed an increase in claims for jobless benefits last week.
Li & Fung gained 2.2 percent to HK$16.92 in Hong Kong, while Billabong International Ltd. (BBG), a surfwear company that counts the Americas as its biggest market, rose 1.1 percent to A$2.85 in Sydney.
Fast Retailing Co. (9983), Asia’s biggest clothing retailer, jumped 8.6 percent to 18,970 yen in Tokyo. It posted the steepest gain in the MSCI Asia Pacific Index after raising its forecast for annual profit to a record and saying sales outside Japan will drive growth.
Victek led declines among South Korea’s defense contractors. The maker of military communications equipment tumbled 13 percent to 2,350 won. Its shares have surged about 39 percent since North Korea said on March 16 it planned to test a long-range rocket to carry a satellite into orbit.
Speco Co., which makes fin stabilizers for naval ships, dropped 10 percent to 2,800 won. Huneed Technologies, a maker of radio frequency walkie-talkies for military use, slid 10 percent to 3,510 won.
Infosys Ltd. (INFO), an Indian software exporter, dropped 13 percent to 2,402.55 rupees in Mumbai trading after forecasting sales that lagged behind analysts’ estimates.
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