Bloomberg News

Japan Stock Futures, Australian Shares Rise on U.S. Budget Talks

December 17, 2012

Japanese stock futures and Australian shares rose as two people familiar with the talks said U.S. President Barack Obama is considering budget concessions after House Speaker John Boehner dropped his opposition to raising tax rates for some top earners.

American Depositary Receipts of Canon Inc. (7751), a Japanese camera manufacturer that gets 80 percent of its sales abroad, gained 0.9 percent. Share of Fuji Xerox Co. might be active after Japan’s biggest maker of color printers said it may miss its sales target for the next fiscal year because of slowing demand. BHP Billiton Ltd. (BHP), Australia’s largest oil producer, advanced 0.8 percent as crude prices rose.

Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 9,865 in Chicago yesterday, up from 9,820 in Osaka, Japan. They were bid in the pre-market at 9,840 in Osaka at 8:05 a.m. local time. Australia’s S&P/ASX 200 Index rose 0.6 percent and New Zealand’s NZX 50 Index was little changed.

“Stocks are gathering momentum amid signs of progress on the U.S. fiscal cliff talks,” said Matthew Sherwood, head of markets research at Perpetual Investment, which manages about $25 billion in Sydney.

Japan’s Nikkei 225 Stock Average (NKY) rose 0.9 percent yesterday to close at the highest level since April 3 after the Liberal Democratic Party won power in a weekend election, fueling expectations that the new government will expand monetary and fiscal stimulus to reverse deflation. The Bank of Japan is scheduled to conclude a policy meeting on Dec. 20.

U.S. Futures

Standard & Poor’s 500 Index futures advanced 0.1 percent. The gauge surged 1.2 percent yesterday, to a two-month high. Senate Majority Leader Harry Reid, a Nevada Democrat, said yesterday it appears the chamber will need to reconvene Dec. 26 to work on the budget.

Obama and Boehner met for about 45 minutes at the White House yesterday with two weeks remaining to avert more than $600 billion in spending cuts and tax increases. Treasury Secretary Timothy Geithner also attended the meeting, according to a Treasury Department statement. Obama is seeking an income-tax rate increase for top earners while Boehner wants to cut spending on entitlement programs.

The MSCI Asia Pacific Index rose 12 percent this year as central banks from the U.S., Europe, Japan and China took action to spur economic growth. The gauge traded at 14.4 times average estimated earnings compared with 13.8 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Crude oil advanced 0.2 percent to $87.37 a barrel in New York, a third day of gains.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. was little changed at 95.81 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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