Bloomberg News

Asia Stocks Climb Amid Global Policy Stimulus Speculation

June 05, 2012

Asian Stocks Advance Amid Speculation on Global Policy Stimulus

A pedestrian walks past the BHP Billiton Ltd. headquarters in Melbourne. Photographer: Carla Gottgens/Bloomberg

Asian stocks rose amid speculation global policy makers will join the Reserve Bank of Australia in taking steps to stimulate economic growth and after a four-day drop left the regional gauge at the cheapest level this year.

Commonwealth Bank of Australia, the nation’s biggest lender by market value, advanced 1.9 percent as the central bank cut interest rates. Canon Inc. (7751), a Japanese camera maker whose shares fell yesterday to the lowest level since April 2009, gained 3.4 percent on a stock buyback plan. Qantas Airways Ltd. (QAN) tumbled 19 percent in Sydney to a record low after forecasting full-year profit may plunge as much as 91 percent.

The MSCI Asia-Pacific Index (MXAP) rose 1.3 percent to 110.43 as of 8:07 p.m. in Tokyo, snapping a four-day decline and recouping some of yesterday’s 2.1 percent loss. Almost three stocks rose for each that fell on the gauge.

“We are likely to see a reasonably strong policy response in a number of countries,” said Angus Gluskie, managing director at White Funds Management in Sydney, who manages more than $350 million. “It’s stacking up to be a reasonably good buying opportunity.”

The MSCI Asia-Pacific has fallen 14 percent from its peak this year on Feb. 29. The measure slumped 10 percent in May, the biggest monthly loss since October 2008, when global markets tumbled following the collapse of Lehman Brother Holdings Inc. Equities continued declines this month as a U.S. jobs report added to concern global growth is slowing amid a deepening debt crisis in Europe.

Kospi, Topix

South Korea’s Kospi Index gained 1.1 percent. Japan’s Nikkei 225 (NKY) Stock Average rose 1 percent, while the broader Topix Index, which yesterday plunged to a level not seen since 1983, rose 1.8 percent.

Taiwan’s Taiex Index jumped 1.5 percent on speculation the government will take steps to boost stocks after the benchmark index slumped the most in almost seven months yesterday.

Australia’s S&P/ASX 200 (AS51) Index jumped 1.5 percent. The Reserve Bank of Australia cut the benchmark interest rate today by a quarter point to 3.5 percent, the lowest level since 2009, as concern about Europe’s fiscal problems and slowing Chinese growth outweighed low domestic unemployment.

Australian bank shares climbed. Commonwealth Bank gained 1.9 percent to A$50. Australia & New Zealand Banking Group Ltd. advanced 2.2 percent to A$21.32. National Australia Bank Ltd. (NAB) rose 2.4 percent to A$22.55 and Westpac banking Corp. climbed 1.9 percent to A$20.59.

Fed, ECB

Finance ministers and central bank governors from the Group of Seven countries will hold a call today to discuss Europe’s debt crisis, Canadian Finance Minister Jim Flaherty told reporters yesterday in Toronto.

U.S. Federal Reserve Chairman Ben S. Bernanke may respond to weakness in the American job market by announcing further steps to stimulate growth, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York.

The European Central Bank may cut its benchmark interest rate from 1 percent as soon as this week, Holger Schmieding, chief economist at Berenberg Bank in London, said in a June 1 report. China will respond with a 2 trillion yuan ($314 billion) fiscal stimulus this year and next, according to Donald Straszheim, senior managing director of New York-based ISI Group.

U.S. Futures

Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge advanced less than 0.1 percent in New York yesterday, reversing earlier losses.

China’s benchmark Shanghai Composite Index (SHCOMP) advanced 0.2 percent. The gauge dropped by 64.89 points yesterday, matching the date on which Chinese authorities crushed student-led protests on June 4, 1989. Searches for “Shanghai Composite” were blocked from China’s most-used microblogging service, Sina Corp.’s Twitter-like Weibo service.

The MSCI Asia-Pacific fell 4.2 percent this year through yesterday, compared with a 4.4 percent drop on the Stoxx Europe 600 Index and a 1.6 percent gain on the S&P 500. Declines in regional equity markets cut the average price of stocks on the Asian benchmark to 11.2 times estimated earnings, the lowest this year. That compares with 12.2 times for the S&P 500 and 9.7 for the Stoxx 600.

Rio Tinto Group (RIO), the world’s third largest mining company, increased 1.6 percent to A$53.75 as commodity prices advanced. BHP Billiton Ltd., the world’s largest mining company, climbed 1.3 percent to A$31.16.

The Thomson Reuters/Jefferies CRB Index (CRY) of raw materials climbed 0.6 percent yesterday.

Yen Falls

Japanese exporters gained after the yen fell against 15 of its 16 major counterparts yesterday. A weaker Japanese currency boosts the value of overseas earnings when repatriated.

Canon climbed 3.4 percent to 2,991 yen. Mazda Motor Corp. added 5.6 percent to 94 yen. Sony Corp., Japan’s No. 1 exporter of consumer electronics, rose 3.3 percent to 1,029 yen after falling yesterday to its lowest since 1980.

Qantas, Australia’s largest carrier, tumbled 19 percent to A$1.155. Underlying profit before tax may fall as much as 91 percent because of losses on international routes, the airline said today.

Rengo Co. slumped 14 percent to 447 yen as Japan’s Fair Trade Commission confirmed it’s investigating the company. The Nikkei newspaper earlier said the company is being examined on suspicion of price fixing of cardboard products. The company manufactures corrugated and paperboard containers. Tomoku Ltd., also named by the Nikkei as among companies being examined, slumped 4.9 percent to 213 yen.

Wharf Holdings Ltd. (4) jumped 1.5 percent to HK$39.80 after Hong Kong renewed the lease on a cruise-ship terminal and shopping mall run by the developer.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editors responsible for this story: Jason Clenfield at jclenfield@bloomberg.net; Nick Gentle at ngentle2@bloomberg.net


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