Asian stocks headed for the first advance in five days after a drop in U.S. new home sales fueled speculation the Federal Reserve may take new steps to spur growth, boosting demand for growth-sensitive shares.
Nomura Holdings Inc. (8604), Japan’s biggest brokerage by market value, advanced 5.7 percent, leading gains among financial firms on a plan to name a new chief executive officer amid an insider- trading scandal. Qantas Airways Ltd. rose 9.6 percent in Sydney on a report the carrier was close to forming a long-haul alliance. Olympus Corp. (7733) jumped 9.6 percent after Terumo Corp., a Japanese medical device maker, proposed to invest 50 billion yen ($639 million) in the camera maker as part of a merger.
The MSCI Asia Pacific Index rose 0.9 percent to 113.94 as of 8:55 p.m. in Tokyo, with five stocks rising for every four that fell. All 10 industry groups on the measure advanced, led by financial stocks on expectations that the U.S. Federal Reserve will embark on a third round of quantitative easing.
“Company-specific news is driving us, but the market is generally a bit more positive based on the QE3 expectation,” said Matt Riordan, a portfolio manager who helps manage about $6.5 billion at Paradice Investment Management Pty. in Sydney. “Europe is lurching and no closer to a solution.”
The MSCI Asia Pacific Index fell about 12 percent from this year’s high on Feb. 29 through yesterday amid concern China’s economy is slowing and Europe’s sovereign-debt crisis will worsen. The regional benchmark index traded at 11.5 times estimated earnings as of yesterday, compared with 13 for the Standard & Poor’s 500 Index and 10.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average rose 0.9 percent. South Korea’s Kospi Index advanced 0.7 percent even after data showed the nation’s economy grew at the slowest pace in almost three years. Australia’s S&P/ASX 200 gained 0.6 percent. New Zealand’s NZX 50 Index advanced 0.8 percent as the nation’s central bank extended a pause in its benchmark interest rate. Singapore’s Straits Times Index added 0.7 percent.
Hong Kong’s Hang Seng Index closed 0.1 percent lower after swinging between gains and losses. London Metal Exchange shareholders approved the $2.2 billion takeover offer from Hong Kong Exchanges & Clearing Ltd., ending a 10-month pursuit. China’s Shanghai Composite Index lost 0.5 percent after Il Houng Lee, the International Monetary Fund’s top official in China, said monetary stimulus measures in place are enough to support growth.
Futures on the S&P 500 (SPXL1) rose 1.2 percent today. The gauge lost less than 0.1 percent in New York yesterday, erasing gains in the final hour of trading, after a report showed demand for new U.S. homes unexpectedly dropped in June from a two-year high.
Weaker-than-expected economic data intensified bets that the central bank is moving closer to taking new steps to spur economic growth. Fed Chairman Ben S. Bernanke last week said policy makers are studying options for further easing that could be deployed in case economic growth remains too feeble to produce a lasting decline in unemployment. The Federal Open Market Committee meets next week.
Financial and industrial shares accounted for half of the advance in the MSCI Asia Pacific measure today.
Nomura rose the most among financial firms on the index, advancing 5.7 percent to 259 yen. The brokerage plans to name Koji Nagai, president of its domestic brokerage unit, as chief executive officer to replace Kenichi Watanabe, according to two people with knowledge of the matter. Watanabe and Chief Operating Officer Takumi Shibata will step down to take responsibility for incidents in which employees leaked information about clients’ share sales to traders, two people said earlier today.
Qantas Airways led industry shares higher after the Australian Financial Review said the carrier was close to forming a long-haul alliance with Emirates Airline. The shares rose 9.6 percent to A$1.085 in Sydney.
Among other stocks that rose, Olympus surged 9.6 percent to 1,400 yen in Tokyo. Terumo Corp., Asia’s biggest maker of medical devices, proposed investing 50 billion yen in the scandal-hit camera maker and merging with it, seeking to scupper a tie-up by Sony Corp.
Earnings have missed analyst estimates for 51 percent of the 91 firms listed on the Asia-Pacific index that have reported quarterly results and offered forecasts this month, according to data compiled by Bloomberg.
Canon Inc. (7751), the world’s No. 1 camera maker, slumped 7.8 percent to 2,470 in Tokyo after cutting its full-year profit forecast to 250 billion yen due to a stronger yen and expectations for weaker global economic growth.
“On the one hand, you’re going to see a lot of weakness from global cyclical export companies,” Kathy Matsui, chief Japan strategist at Goldman Sachs Group Inc. in Tokyo, told Bloomberg TV. “On the other hand, you’re going to see surprisingly resilient results coming from domestic demand orientated companies.”
Sands China Ltd., the Asian unit of Sheldon Adelson’s Las Vegas company, lost 4.9 percent to HK$21.15 after saying its second-quarter net income fell 40 percent from last year.
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