Bloomberg News

Japan, Australian Stock Futures Gain on Stimulus Outlook

June 06, 2012

Japanese and Australian stock futures climbed as global policy makers signaled they may take steps to stimulate economic growth.

American Depositary Receipts of Mitsubishi Corp. (8058), the biggest Japanese trading house, rose 2.3 percent from the closing price in Tokyo and those of Komatsu Ltd., a mining equipment maker, gained 2.9 percent as investors bought shares of companies with profits closely tied to economic growth. ADRs of BHP Billiton Ltd. (BHP), the world’s largest mining company, advanced 2.4 percent in Sydney as metals prices climbed.

Futures on Japan’s Nikkei 225 Stock Average expiring this month closed at 8,665 in Chicago yesterday, up from 8,530 in Osaka, Japan. They were bid in the pre-market at 8,650 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index advanced 1.5 percent today. New Zealand’s NZX 50 Index rose 0.5 percent in Wellington.

“The Chinese will take action to stimulate the economy and the Americans will similarly respond with an extension of Operation Twist or more quantitative easing,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “For a sustained rally, we need a period of stability where we’re not in a fire-fighting-crisis mode.”

European Central Bank President Mario Draghi said policy makers discussed cutting interest rates yesterday and officials stand ready to act as the euro region’s growth outlook worsens.

Federal Reserve Bank of Atlanta President Dennis Lockhart said extending Operation Twist, the central bank’s stimulus program that lengthen maturities of debt on its balance sheet, is an “option on the table.” Chinese Premier Wen Jiabao vowed last month to focus more on increasing growth after trade and domestic demand were below forecasts in April.

U.S. Futures

Futures on the Standard & Poor’s 500 Index advanced 0.1 percent today. The gauge soared 2.3 percent yesterday for its biggest gain of the year.

The MSCI Asia-Pacific (MXAP) fell 2 percent this year through yesterday, compared with a 1.9 percent drop on the Stoxx Europe 600 Index and a 4.6 percent gain on the S&P 500. Declines in regional equity markets cut the average price of stocks on the Asian benchmark to 11.3 times estimated earnings. That compares with 12.6 times for the S&P 500 and a multiple of 10 for the Stoxx 600.

The Asian benchmark gauge has dropped 13 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.

The S&P GSCI gauge of commodities gained 1.3 percent yesterday.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. climbed 2.7 percent to 90.21 yesterday in New York, bringing its two-day gain to 4 percent, the most since April 12.

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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