Asian stocks rose as declines in Japanese consumer prices added to the case for more monetary stimulus, boosting the Topix Index to its longest weekly winning streak in 40 years. Shares also gained after U.S. jobless claims fell to a five-year low.
Sony Corp. (6758) rose 8.5 percent in Tokyo on a report it may sell its lithium battery business. Karoon Gas Australia Ltd. (KAR) gained 14 percent after the explorer said it discovered oil in Brazil. Great Eagle Holdings Ltd. added 14 percent after the real estate company proposed a spin-off of its Hong Kong hotels. Samsung Electronics Co. dropped 2.5 percent to its lowest close since Nov. 30 after warning that the South Korean currency’s strength will hurt future earnings.
The MSCI Asia Pacific Index (MXAP) rose 0.3 percent to 131.83 as of 7:19 p.m. in Tokyo. The gauge is headed for a 0.7 percent loss this week, the biggest decline since November, after a two- day retreat from the highest close in 17-months on Jan 22. About three stocks gained for every two that fell.
“Investors are becoming more optimistic about the earnings prospects for Japanese exporters with the yen weakening so much,” said Masaru Hamasaki, chief strategist at Toyota Asset Management Co., which oversees about $20 billion. “Good economic data out of the U.S., as well as the hope placed in policy makers’ monetary easing measures,” are boosting shares.
The MSCI Asia Pacific excluding Japan Index dropped 0.3 percent to 475.78 as consumer-staple and financial shares declined in Hong Kong and China.
The MSCI Asia Pacific Index jumped 10 percent through yesterday from Nov. 14, when the announcement of elections in Japan spurred a rally on speculation a new government would take steps to end deflation. Asia’s benchmark equities gauge traded at 14.2 times average estimated earnings, compared with 13.5 for the Standard & Poor’s 500 Index and 12.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japan’s Topix gained 2.2 percent today, rising for an 11th straight week, the longest such winning streak since January 1973. Consumer prices declined for the sixth time in seven months, highlighting the challenge the Bank of Japan faces in reaching its 2 percent inflation target.
The yen remained weaker after touching a 2 1/2-year low as BOJ Governor Masaaki Shirakawa said he will make “considerable efforts” to reach the price target. Declines in the currency boost the earnings outlook for the country’s exporters.
Australia’s S&P/ASX 200 Index (AS51) rose 0.5 percent, advancing for an eighth day, its longest streak of advances in almost three years.
Hong Kong’s Hang Seng Index fell 0.1 percent and China’s Shanghai Composite Index slid 0.5 percent as losses in consumer companies and financial stocks outpaced a rise in health care shares.
South Korea’s Kospi Index (KOSPI) lost 0.9 percent as Samsung dropped and Kia Motors Corp. joined larger affiliate Hyundai Motor Co. in posting falling profits last quarter.
Futures on the S&P 500 were little changed today. Most U.S. stocks rose yesterday as an unexpected drop in jobless claims and better-than-forecast earnings from Netflix Inc. and Xerox Corp. offset the worst slump for Apple Inc. (AAPL:US) in four years.
Applications for U.S unemployment insurance payments decreased by 5,000 to 330,000 in the week ended Jan. 19, the fewest since 2008, the Labor Department said yesterday. Economists had expected 355,000 claims.
Some 75 percent of the 134 companies in the S&P 500 that have released results so far exceeded profit projections, according to data compiled by Bloomberg. Analysts on average forecast growth of 3.8 percent in fourth-quarter profit, the data show.
Karoon surged the most in 15 months in Sydney trading, rising 14 percent to A$6.15 in Sydney after the explorer struck oil in Brazil’s Santos Basin. The discovery provides “confidence in the other prospects within Karoon’s blocks,” the Mt. Martha, Victoria-based company said today in a statement.
Dainippon Sumitomo Pharma Co. advanced 12 percent to 1,416 yen in Tokyo after rising as much as 24 percent, the most in 37 years. Shares surged a second day after Japanese national broadcaster NHK reported the company will apply for clinical trials on the world’s first drug targeting cancer stem cells.
The company’s fundamentals haven’t changed, said Barclays Plc analyst Atsushi Seki, who rates the stock underweight.
Great Eagle jumped 14 percent to HK$31.70 in Hong Kong after saying it submitted a proposal to spin-off its hotel properties in the city.
Li Ning Fundraising
Among stocks that fell, Li Ning Co., a sportswear company named after its Olympic gymnast founder, tumbled 15 percent to HK$5.30 in Hong Kong after saying it plans to raise as much as HK$1.87 billion ($241 million) offering convertible securities to fund efforts to revive its brand.
GCL-Poly Energy Holdings Ltd., a maker of polysilicon and solar wafers, dropped 7.4 percent to HK$2.14. The shares dropped after China’s government said it aims to have 21 gigawatts of solar capacity by 2015. Shanghai Securities News last month reported China may raise the target to 40 gigawatts.
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