Bloomberg News

Asian Stocks Advance After Two-Day Loss on Stimulus Bets

March 05, 2013

Asian Stocks Snap Two-Day Loss on Federal Reserve Stimulus Bets

A pedestrian holding an umbrella walks past an electronic stock board outside a securities firm in Tokyo. Photographer: Junko Kimura/Bloomberg

Asian stocks climbed, with the regional benchmark index rising after two days of losses, amid speculation central bankers will continue stimulus measures and as China maintained its economic-growth target for 2013.

James Hardie Industries SE, a building-materials supplier that gets two-thirds of its sales from the U.S., rose 3.9 percent in Sydney. SK Hynix Inc., the world’s second-largest maker of computer memory chips, added 3.9 percent in Seoul after Kiwoom Securities Co. said chip prices will continue to gain this month. Fast Retailing Co., Asia’s biggest clothier, jumped 5.5 percent in Tokyo after reporting same-store sales at its Uniqlo outlets in Japan increased last month.

The MSCI Asia Pacific Index climbed 0.5 percent to 134.42 as of 9:33 p.m. in Tokyo, with about five shares rising for every four that fell. The gauge capped a four-month advance in February, the longest such winning streak since September 2009, as central banks around the world maintained loose monetary policies to support economic growth.

“The continued penchant for monetary largess by the major central banks around the world still does provide an unprecedented cushion for investors,” said Benjamin Yeo, Singapore-based head of Asian investment strategy at Barclays Plc’s wealth management unit, which has about $250 billion under management. “The risk-on mode will prevail for the remainder of 2013.”

Global Easing

U.S. Federal Reserve Vice Chairman Janet Yellen said yesterday the U.S. central bank should press on with $85 billion in monthly bond buying. Kikuo Iwata, a nominee for Bank of Japan deputy governor, said in a confirmation hearing today that the central bank should buy longer-term bonds to help achieve a 2 percent inflation target.

The Shanghai Composite Index climbed 2.3 percent, the most since Jan. 28. China maintained its economic-growth target at 7.5 percent for 2013 and raised its budget deficit forecast as the government cuts taxes and boosts measures to support consumer demand. The median estimate of 43 analysts surveyed in February by Bloomberg News expected 8.1 percent growth in 2013.

The country lacks a sustainable growth model and faces mounting “social problems” as Chinese Premier Wen Jiabao ends a decade in power that saw the economy grow fourfold to be the world’s second-largest, he told almost 3,000 delegates at his final report to the National People’s Congress in Beijing today.

Wen steps down at the congress, which runs through March 17, after overseeing China’s rise to an $8 trillion economy that surpassed Japan and Germany and sustained its expansion through the global financial crisis. Those achievements have come at the cost of surging inequality, environmental degradation and growing financial risks, challenges that he leaves for incoming Premier Li Keqiang.

RBA Decision

Hong Kong’s Hang Seng Index gained 0.1 percent, while Japan’s Nikkei 225 Stock Average (NKY) rose 0.3 percent. South Korea’s Kospi Index added 0.2 percent. Taiwan’s Taiex Index gained 0.8 percent

Australia’s S&P/ASX 200 Index increased 1.3 percent. The Reserve Bank of Australia kept its benchmark interest rate unchanged at a half-century low as the world economy stabilizes and commodity prices recover. The country’s retail sales grew faster than economists forecast in January, while the current- account deficit unexpectedly narrowed in the three months through December, government reports released today showed.

Shares on the Asia-Pacific index traded at 14.8 times estimated earnings compared with 13.7 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600, according to data compiled by Bloomberg.

U.S. Stocks

Futures on the S&P 500 rose 0.2 percent today. U.S. shares rose yesterday, sending the Dow Jones Industrial Average to its highest closing level since 2007, as speculation the Fed will continue with so-called quantitative easing to stimulate the economy tempered concern over spending cuts and China’s economy.

“Turning to the potential costs of the Federal Reserve’s asset purchases, there are some that definitely need to be monitored over time,” Yellen said yesterday in a speech in Washington. “At this stage, I do not see any that would cause me to advocate a curtailment of our purchase program.”

James Hardie climbed 3.9 percent to A$9.95 in Sydney. Man Wah Holdings Ltd. (1999), a sofa maker that counts the U.S. as its biggest market, increased 5.3 percent to HK$7.52 in Hong Kong. AU Optronics Corp., a Taiwanese flat-panel maker that gets about 60 percent of sales overseas, gained 5.1 percent to NT$13.35 in Taipei.

Information-technology companies posted the second-biggest gain among the 10 industry groups in the MSCI Asia Pacific Index, according to data compiled by Bloomberg.

Memory Chips

Chipmakers advanced after Kiwoon Securities said prices of dynamic random-access memory chips will continue to increase, boosting the earnings outlook at Hynix and Samsung Electronics (005930) Co. Benchmark DRAM prices jumped 42 percent this year, according to TrendForce Corp.’s DRAMeXchange, which tracks the market.

SK Hynix climbed 3.9 percent to 27,000 won in Seoul. Samsung Electronics, the world’s largest maker of computer- memory chips, gained 0.7 percent to 1.555 million won.

Fast Retailing jumped 5.5 percent to 26,770 yen after saying same-store sales at its Uniqlo outlets in Japan increased 9.6 percent in February from a year earlier, boosted by winter demand.

Want Want China Holdings Ltd. (151), China’s largest maker of rice cakes, advanced 3.6 percent to HK$11.48 after reporting that full-year net income increased 32 percent to $553.8 million from a year earlier.

Of the 417 companies on the MSCI Asia Pacific Index (MXAP) that reported earnings since January and for which estimates are available, 49 percent exceeded expectations, according to data compiled by Bloomberg.

Among stocks that fell, Hisamitsu Pharmaceutical Co. slipped 5.2 percent to 5,290 yen. The drug maker failed to win the support of U.S. regulatory advisers for an experimental medication as an alternative to hormonal therapy in treating hot flushes linked to menopause.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; 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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