Bloomberg News

Japan Stock Futures Little Changed as China Leader Meeting Ends

November 13, 2012

Japanese stock futures were little changed, indicating the Nikkei 225 (NKY) Stock Average will halt its longest streak of losses in seven months, as a once-in-a-decade meeting to choose new leaders in China draws to a close. Australian shares gained.

American Depositary Receipts of Sharp Corp. (6753) surged 6.6 percent as Kyodo News reported Intel Corp. may invest as much as 40 billion yen ($500 million) in the Japanese TV maker. KDDI Corp. shares may be active after Takashi Tanaka, president of Japan’s No. 2 mobile-phone company, said in interview with Nikkei that sales may top estimates. Shares of Singapore Telecommunications Ltd. may be active as earnings at Southeast Asia’s biggest phone company missed estimates and it cut its sales forecast.

Futures on Japan’s Nikkei 225 Stock Average expiring next month closed at 8,655 in Chicago yesterday, down from 8,670 in Osaka, Japan. They were bid in the pre-market at 8,680 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.1 percent today and New Zealand’s NZX 50 Index retreated 0.4 percent in Wellington.

“A majority of investors continue to see Japan shares as undervalued,” said Naoki Kamiyama, chief equity strategist at Bank of America Corp. in Tokyo. “A slight majority of investors now expect Japan earnings to improve.”

The Nikkei 225 Stock Average has fallen the past seven days, the longest losing streak since April, wiping about 292 billion yen from the value of the Japanese benchmark gauge. A report on Nov. 12 showed Japan’s gross domestic product contracted in the third quarter by the most since last year’s earthquake.

China Congress

China’s Party Congress meeting is scheduled to conclude today and the Politburo Standing Committee, the top decision- making body, will be unveiled tomorrow.

Global hedge funds were the most optimistic on equities in more than five years in the lead-up to the U.S. presidential election as global growth expectations climbed to an 18-month high, a Bank of America survey showed yesterday. Total holdings in equities for the respondents, who together oversee $568 billion, increased to a 16-month high.

Futures on the Standard & Poor’s 500 Index advanced 0.2 percent today. The gauge dropped 0.4 percent yesterday as a slump in financial and technology shares erased an earlier rally led by Home Depot Inc., as investors watched for progress on Washington’s budget debate.

The MSCI Asia Pacific (MXAP) Index gained 10 percent through yesterday from this year’s low on June 4 as central banks added stimulus to spur growth and data showed a slowdown in China may be ending. The gauge traded at 13.3 times estimated earnings, compared with 13.2 for the Standard & Poor’s 500 Index, 12.1 for the Stoxx Europe 600 Index and 15.8 for Japan’s Nikkei 225, according to data compiled by Bloomberg.

Today is the last day of trading before MSCI Inc. announces its semi-annual rebalancing of indexes.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S. sank 2.2 percent to 90.73 in New York yesterday.

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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