Bloomberg News

Asian Stocks Rise as China, Japan Data Eases Growth Fears

July 02, 2012

Asian stocks rose for a fourth day in the longest winning streak since March as economic data from China to Japan and steps by European leaders to address the sovereign-debt crisis eased concern global growth is slowing.

BHP Billiton Ltd. (BHP), the world’s largest mining company, climbed 0.9 percent after a Chinese manufacturing gauge beat economists’ predictions. TDK Corp. (6762), a maker of electronic parts that gets almost 30 percent of its revenue from China, gained 1.6 percent in Tokyo. Aristocrat Leisure Ltd. (ALL), an Australian manufacturer of gaming machines, slumped 11 percent after reporting preliminary earnings for the first half of this year.

The MSCI Asia Pacific Index advanced 0.4 percent to 117.67 as of 7:14 p.m. in Tokyo. Markets are closed in Hong Kong today. The stock gauge capped last week the biggest weekly gain since January, jumping 2.7 percent as euro-zone leaders agreed to relax conditions for recapitalizing lenders.

“The economic momentum in Asia and the U.S. is still intact as long the European situation doesn’t disturb that momentum,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Asia Ltd., which oversees about $165 billion. “It will take years to fully resolve the underlying economic issues and repair the fiscal balance sheets in Europe. If Europe can just stabilize the financial markets and work things through, they stand a good chance of fixing the problems.”

Tankan Survey

Japan’s Nikkei 225 Stock Average fell less than 0.1 percent even after the quarterly Tankan index on sentiment among the nation’s manufacturers beat estimates. South Korea’s Kospi Index lost 0.1 percent, China’s Shanghai Composite Index was little changed and Australia’s S&P/ASX 200 Index rose 0.9 percent. Futures on the Standard & Poor’s 500 Index added 0.1 percent.

The MSCI All-Country World Index of shares in 45 nations climbed 6 percent over the first six months of 2012, led by the U.S., where $1.1 trillion was added to share values. The MSCI Asia Pacific Index (MXAP) climbed 3 percent through the end of June, compared with an 8.3 percent advance by the S&P 500 and a 2.7 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 10.6 times for the Stoxx 600.

In China, the government’s Purchasing Managers’ Index, a measure of manufacturing, was 50.2 in June, little changed from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said at the weekend. That beat the 49.9 median estimate in a Bloomberg News survey of 24 economists. A reading above 50 indicates expansion. A separate PMI, compiled by HSBC Holdings Plc and Market Economics, posted a final reading of 48.2 in June compared with 48.4 in May, according to figures released today.

China Home Prices

“The Chinese PMI isn’t as bad as expected,” said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities Co. in Tokyo. “The decline may help expectations for easing monetary policies to be continued.”

China’s new home prices rose in May for the first time in 10 months as the government eased monetary policies to bolster the economy, according to a survey released today by SouFun Holdings Ltd., the nation’s biggest real-estate website owner.

Companies that do business in China advanced. BHP Billiton rose 0.9 percent to A$31.72. TDK climbed 1.6 percent to 3,250 yen. Murata Manufacturing Co., an electronic-parts maker that gets the highest proportion of sales in China among Topix Index companies, rose 0.5 percent to 4,175 yen in Osaka.

Rate Cut

Bets on global central bank action to spur economic growth helped boost stocks in the first half of 2012. Economists expect this to continue with the European Central Bank lowering its benchmark interest rate July 5, according to the median of 57 estimates in a Bloomberg survey.

In Japan, the Tankan index of manufacturers’ sentiment improved to minus 1 in June from minus 4 in March, the Bank of Japan said today in Tokyo. The median estimate of 19 economists surveyed by Bloomberg News was for a reading of minus 4. A negative number means pessimists outnumber optimists.

Nippon Yusen K.K. (9101) jumped 2.4 percent to 214 yen in Tokyo after company President Yasumi Kudo said freight-forwarding and warehousing businesses led by unit Yusen Logistics Co. will boost sales to 800 billion yen ($10 billion) within seven years.

Aristocrat Leisure slumped 11 percent to A$2.45 in Sydney as the company reported preliminary first-half profit of between A$30 million ($30.7 million) and A$33 million.

To contact the reporters on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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


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