Bloomberg News

Asian Stocks Snap Four-Day Loss on U.S. Data, Earnings

April 25, 2012

Pedestrians are reflected on an electronic stock board outside a securities firm in Tokyo, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Pedestrians are reflected on an electronic stock board outside a securities firm in Tokyo, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Asian stocks rose, with the regional benchmark index headed for its first advance in five days, as corporate profits beat estimates and U.S. housing data added to signs the world’s biggest economy is improving

Samsung Electronics Co., Asia’s largest consumer electronics maker, rose 1.7 percent in Seoul. Hon Hai Precision Industry Co. (2317), a maker of Apple Inc. products, added 2.4 percent in Taipei after the U.S. company’s profit almost doubled. Nomura Holdings Inc., Japan’s largest brokerage, rose 2.4 percent on speculation it may post higher net income. Yoshinoya Holdings Co., a restaurant chain that imports beef, fell 2.4 percent in Tokyo after a case of mad-cow disease was reported in the U.S.

“A recovery trend on earnings is being seen,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The U.S. economy is still in mild recovery.”

The MSCI Asia Pacific Index (MXAP) gained 0.3 percent to 123.61 as of 5:11 p.m. in Tokyo, with almost three shares rising for every two that fell. Trading volumes in Tokyo and Hong Kong were at least 28 percent lower than the 30-day average, while those in Shanghai were 41 percent higher. The gauge declined the past four days as political instability in Europe deepened concern governments will struggle to contain the region’s debt crisis and amid signs China’s economy is slowing.

Japan’s Nikkei 225 Stock Average (NKY) advanced 1 percent and Taiwan’s Taiex Index added 0.9 percent. China’s Shanghai Composite Index rose 0.8 percent, reversing losses of as much as 0.5 percent. Hong Kong’s Hang Seng Index lost 0.2 percent. South Korea’s Kospi Index lost 0.1 percent. Markets in Australia and New Zealand were closed for holidays.

India Credit Outlook

India’s Sensitive Index dropped 1 percent, heading for its lowest close since Jan. 30, after the nation’s credit outlook was cut to negative by Standard & Poor’s, which cited risks from slower economic growth and a widening current-account deficit. The nation’s sovereign-debt rating is one step above junk status.

Futures on the Standard & Poor’s 500 Index advanced 0.7 percent today. The index gained 0.4 percent in New York yesterday amid better-than-estimated earnings at companies from AT&T Inc. to 3M Co. Apple earnings, which also beat analysts’ estimates, were released after the market closed.

Asian exporters advanced after a report showed the U.S. housing market is stabilizing, with home prices in 20 cities dropping in February at the slowest pace in 12 months and stronger-than-expected sales of new homes in March.

Samsung Electronics (005930), which gets 20 percent of sales from the U.S., advanced 1.7 percent to 1.305 million won in Seoul. Canon Inc., the world’s biggest camera maker, gained 1.5 percent to 3,800 yen in Tokyo. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., added 0.9 percent to HK$16.16 in Hong Kong.

Apple Boost

Technology companies posted the biggest advance among the 10 industry groups in MSCI Asia Pacific Index. Apple suppliers gained after results from the Cupertino, California-based company reflected robust demand for iPhones in China and sales of the new iPad.

Net income in the fiscal second quarter climbed 94 percent to $11.6 billion from a year earlier as sales rose 59 percent to $39.2 billion, Apple said in a statement.

Hon Hai, which gets about 37 percent of its revenue from Apple, increased 2.4 percent to NT$106 in Taipei. Foxconn Technology Co. (2354), a unit of Hon Hai that supplies casings to the U.S. company, rose 2.5 percent to NT$103.50.

LG Display Co., a maker of liquid-crystal displays that counts Apple as a customer, gained 1.9 percent to 26,850 won in Seoul as it predicted a return to profit in the three months ending June after three quarters of losses.

Nomura Speculation

Nomura Holdings climbed 2.4 percent to 344 yen in Tokyo on speculation Japan’s biggest brokerage may report an increase in quarterly profit trading gains outweighed declines in investment banking, according to two people with knowledge of the matter.

Net income climbed to about 18 billion yen ($221 million) for the three months ended March 31 from 11.9 billion yen a year earlier, the people said, declining to be identified before earnings are announced on April 27. The average estimate of nine analysts surveyed by Bloomberg was for profit of 14.4 billion yen.

Among stocks that dropped, Yoshinoya slid 2.4 percent to 102,800 yen on concern a mad-cow case in the U.S. may hurt sales at the restaurant chain, which imports meat for its beef bowls. “There is no problem with our beef,” Haruhiko Kizu, a Yoshinoya spokesman said by telephone today. He declined to comment on the drop in the company’s shares.

Wipro Ltd. (WPRO) slumped 6.9 percent to 411.50 rupees in Mumbai after India’s third-largest software exporter posted fourth- quarter sales that missed estimates.

The MSCI Asia Pacific Index gained 8.3 percent this year through yesterday, compared with a 9.1 percent advance by the S&P 500 and a 4 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 12.6 times estimated earnings on average, compared with multiples of 13.1 for the S&P 500 and 10.6 times for the Stoxx 600.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

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


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