Bloomberg News

Japanese Stock Futures Gain on Spain Bailout Optimism

October 16, 2012

Japanese stock futures and Australian equities rose as two German lawmakers suggested they may reverse their resistance to a bailout for Spain and after U.S. companies reported better-than-estimated profits.

American Depositary Receipts of Canon Inc. (7751), a camera maker that gets 80 percent of its sales outside Japan, climbed 1.4 percent. BHP Billiton Ltd. (BHP), the world’s largest mining company, gained 1.4 percent in Sydney after reporting first-quarter iron- ore production in line with estimates and as metals prices advanced. News Corp. (NWS) rose 1 percent in Sydney as Chairman and Chief Executive Officer Rupert Murdoch said shareholders rejected a proposal to split the top two roles at the company.

Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 8,780 in Chicago yesterday, up from 8,710 in Osaka, Japan. They were bid in the pre-market at 8,770 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.9 percent. New Zealand’s NZX 50 Index rose 0.8 percent in Wellington.

“There seems to be a lot of jawboning ahead of an inevitable bailout for Spain,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “Germany is being more accommodative of any such package and that should be taken as a positive, removing some of the systemic risk.”

Germany is open to Spain seeking a precautionary credit line from Europe’s rescue fund, two senior coalition lawmakers said. The comments by Michael Meister, a deputy caucus leader of Chancellor Angela Merkel’s Christian Democratic bloc, and Norbert Barthle, her party’s budget spokesman, signal a reversal of Finance Minister Wolfgang Schaeuble’s position that Germany is opposed to a full sovereign bailout for Spain.

Credit Rating

Spain retained its investment-grade credit rating from Moody’s Investors Service, which cited a reduction in the risk of losing market access.

Futures on the Standard & Poor’s 500 Index advanced 0.1 percent today. The S&P 500 surged 1 percent yesterday, its biggest gain in a month, as a report showed industrial production rose more than forecast last month and corporate earnings topped estimates. Johnson & Johnson and Mattel Inc. advanced after reporting earnings, while Citigroup Inc. climbed as Vikram Pandit stepped down as chief executive officer.

The MSCI Asia Pacific (MXAP) Index rebounded 12 percent through yesterday from this year’s low on June 4 as stimulus measures in Europe, the U.S., Japan and China boosted market sentiment amid a global economic slowdown and Europe’s debt crisis. The Asian benchmark traded at 12.9 times estimated earnings on average, compared with 13.9 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index.

Chinese equities in the U.S. climbed for a fifth day on prospects slowing inflation will allow policy makers to take further steps to stimulate the economy. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in New York climbed 0.7 percent to 95.39, the highest close since May 14.

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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