Bloomberg News

Asian Stocks Rise on Australian GDP, U.S. Services Data

June 06, 2012

Asian stocks rose, with the MSCI Asia-Pacific Index (MXAP) heading for its biggest two-day advance in five months, as reports showed Australia’s economy expanded twice as fast as economists estimated and U.S. service industries grew.

Westfield Group (WDC), the world’s biggest shopping center operator by assets, advanced 3.5 percent in Sydney. Sharp Corp. (6758), Japan’s largest maker of liquid-crystal displays, rose 6.9 percent. Tokyo Derica Co. (9990), which sells women’s leather handbags, surged 17 percent after canceling a share sale.

The MSCI Asia-Pacific climbed 1.3 percent to 111.6 as of 7:23 p.m. in Tokyo, with about four stocks rising for each that fell. The gauge has dropped 14 percent from its peak this year on Feb. 29. amid concern growth is slowing in China and the U.S. as Europe’s debt crisis deepens.

“Expectations for growth have been tempered to such a degree that economic data points are going to surprise to the upside,” said Stephen Corry, Hong Kong-based chief investment strategist at LGT Group, which oversees $12 billion of Asian assets. “There’s potential for more policy stimulus and markets are clearly oversold.”

Futures on the Standard & Poor’s 500 Index advanced 1 percent today. The gauge advanced 0.2 percent in New York yesterday.

Japan’s Nikkei 225 Average (NKY) rose 1.8 percent and Hong Kong’s Hang Seng Index climbed 1.4 percent. The equity market in Korea is closed for a public holiday.

Australian GDP

Australia’s S&P/ASX 200 Index gained 0.3 percent as a report showed gross domestic product expanded 1.3 percent in the first quarter from the previous three months, beating the 0.6 percent average estimate of economists surveyed by Bloomberg News.

Westfield climbed 3.5 percent to A$9.42. Wesfarmers Ltd. (WES), Australia’s second-largest retailer and owner of the Coles supermarket chain, gained 0.7 percent to A$29.11.

In the U.S., service industries sustained their pace of growth in May, showing the biggest part of the U.S. economy is withstanding the impact of the European debt crisis.

The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, rose to 53.7 points last month from April’s 53.5, the Tempe, Arizona-based group said yesterday. The median forecast of 75 economists surveyed by Bloomberg News projected 53.4. Readings above 50 signal expansion.

Spain, Greece

Finance ministers and central bank governors from the Group of Seven economies agreed to coordinate their response to Europe’s financial crisis on a conference call yesterday. G-7 officials said they will work together to help Spain and Greece place their public finances on a sustainable footing, Japanese Finance Minister Jun Azumi told reporters in Tokyo following the call.

The yen fell against the dollar as Azumi indicated G-7 nations remain supportive of intervention to address extreme currency moves. A weaker yen boosts earnings for Japanese export earnings when repatriated. The yen dropped 0.5 percent to 78.75 per dollar yesterday, extending its decline to 0.9 percent this week.

Sharp rose 6.9 percent to 419 yen. Toyota Motor Corp. (7201), Asia’s biggest automaker, advanced 2.5 percent to 2,999 yen. Nissan Motor Corp. added 2.5 percent to 741 yen.

Spain may receive a precautionary credit line from the European Financial Stability Facility, Germany’s Die Welt newspaper reported in a preview of a story that will run today, citing unidentified people familiar with talks about the possible option.

The MSCI Asia-Pacific fell 3.2 percent this year through yesterday, compared with a 4.1 percent drop on the Stoxx Europe 600 Index and a 2.2 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 12.3 times for the S&P 500 and 9.8 for the Stoxx 600.

Tokyo Derica surged 17 percent to 701 yen as it canceled the sale of 1.83 million shares.

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

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


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