Asian stocks advanced for the first time in three days as new-home construction in the U.S. jumped more than forecast, the International Monetary Fund raised its forecast for Japanese growth and the yen weakened
Toyota Motor Corp., the world’s largest carmaker, advanced 1.8 percent as a weakening yen boosted the earnings outlook for exporters. Advantest Corp. paced increases in Tokyo among makers of semiconductor equipment after Intel Corp. (INTC:US) forecast second- quarter sales that would exceed some analysts’ estimates. Cathay Pacific Airways Ltd., Asia’s biggest international carrier by passenger revenue, climbed 2.9 percent in Hong Kong after Deutsche Bank AG raised its rating to buy.
The MSCI Asia Pacific Index gained 0.6 percent to 137.21 as of 6:08 p.m. in Tokyo. Three shares advanced for every two that fell, with eight of the 10 industry groups on the gauge climbing. The benchmark rose 5.5 percent this year through yesterday amid signs the U.S. economy is recovering and as Japanese stocks rallied on speculation the Bank of Japan will boost stimulus.
“U.S. housing starts showed a bright spot and confirmed the view that the economy is on the mend,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The yen will stay in a downtrend given the bold monetary easing by the Bank of Japan, and that leads to optimism exporters’ earnings will outperform.”
Plans for fiscal stimulus and record monetary-policy easing by the Bank of Japan were reflected in the IMF’s increased growth estimates for the world’s third-biggest economy, which were raised to 1.6 percent this year from 1.2 percent and to 1.4 percent in 2014 from 0.7 percent. IMF Chief Economist Olivier Blanchard said the BOJ’s action was “appropriate” and its impact on the yen “a logical consequence.”
Japanese exporters rallied. Toyota Motor gained 1.8 percent to 5,550 yen, Nissan Motor Co. advanced 3.3 percent to 1,024 yen and Ricoh Co., an imaging equipment maker that gets more than half of sales outside Japan, added 3.8 percent to 1,197 yen. The yen fell to 98.34 per dollar.
Japan’s Nikkei 225 Stock Average (NKY) gained 1.2 percent, rebounding from the longest losing streak in three months. New Zealand’s NZX 50 Index and Australia’s S&P/ASX 200 Index both advanced 1.1 percent. Taiwan’s Taiex rose 0.1 percent and the Philippine Stock Exchange Index climbed 0.9 percent.
China’s Shanghai Composite declined less than 0.1 percent, while Hong Kong’s Hang Seng Index (HSI), the year’s worst performing developed-market measure, slipped 0.5 percent.
Investors are the most bullish on Japanese stocks for more than six years, while they are selling euro-area equities amid renewed concern about the region’s debt crisis, a Bank of America Corp. survey of global money managers who oversee about $578 billion showed yesterday.
This year’s gains on the MSCI Asia Pacific index (MXAP) left the gauge trading yesterday at 14.3 times average estimated earnings compared with 14.2 for the Standard & Poor’s 500 Index (SPX) and 12.5 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the Standard & Poor’s 500 Index fell 0.5 percent. The measure climbed 1.4 percent yesterday, rebounding from its biggest drop since November, as housing starts and earnings from Coca-Cola Co. to Johnson & Johnson topped estimates.
New-home construction jumped more than forecast in March, according to Commerce Department figures. Another report showed the cost of living in the U.S. declined in March for the first time in four months as cheaper gasoline and clothing kept inflation in check. Factory production unexpectedly dropped, adding to recent signs that manufacturing is cooling.
South Korea’s Kospi index added 0.1 percent, paring a gain of as much as 0.7 percent. South Korea’s biggest investors are buying more equities than ever at a time of worsening relations with North Korea, lured by the cheapest shares since 2007.
Domestic institutions bought a net 2.2 trillion won ($1.97 billion) of stocks in the two weeks after North Korea announced its highest combat level on March 26, the first of a series of escalating threats from Kim Jong Un’s regime.
Advantest added 2 percent to 1,365 yen and Nikon Corp. gained 0.9 percent to 2,170 yen in Tokyo. Santa Clara, California-based Intel, the world’s biggest semiconductor maker, said yesterday revenue in the current period will be as much as $13.4 billion. Analysts on average had predicted sales of $12.8 billion, according to data compiled by Bloomberg.
Cathay Pacific (293) rose 2.9 percent to HK$12.98. Deutsche Bank raised its rating to buy from sell, saying earnings will start recovering this year as jet fuel prices drop and the carrier switches to more fuel-efficient aircraft.
Singapore Exchange Ltd., operator of Southeast Asis’s biggest bourse, gained 1.2 percent to S$7.79, heading for the highest close since Feb. 20. The company reported fiscal third- quarter profit increased 26 percent as equities and derivatives trading volumes jumped, beating analyst estimates.
Among the stocks that fell, Nomura Holdings Inc. (8604) sank 2.3 percent to 754 yen after Italian prosecutors said they aim to seize 1.8 billion euros ($2.4 billion) of the Japanese brokerage’s assets as part of a probe into Banca Monte dei Paschi di Siena SpA’s.
The seizures are linked to allegations of fraud and usury related to Monte Paschi’s use of derivatives to hide losses, prosecutors in Siena, where the Italian bank is based, said in a statement yesterday. Monte Paschi has claimed Nomura colluded with its former managers to devise one of two derivatives in 2008 and 2009 that hid total losses of much as 557 million euros. Nomura reaped at least 88 million euros from the transaction, dubbed Alexandria, according to the Italian lender.
Nomura, which isn’t under investigation itself, said yesterday that the Tokyo-based bank will “vigorously” contest any suggestion of wrongdoing in the case.
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