Bloomberg News

Asian Stocks Rise as Australia Cuts Interest Rates, Topix Jumps

May 07, 2013

Asian Stocks Rise for Second Day as ECB Prepared to Cut Rates

Pedestrians look at an electronic stock board outside a securities firm in Tokyo. Photographer: Junko Kimura/Bloomberg

Asian stocks rose for a second day as the Reserve Bank of Australia cut its benchmark interest rate and Japan’s Topix Index erased losses from the 2008 collapse of Lehman Brothers Holdings Inc.

Mitsubishi Heavy Industries Ltd. (7011) jumped 4.9 percent after Japan’s No. 2 maker of electricity generation equipment and partner Areva SA won a deal to build a nuclear-power plant in Turkey. Toyota (7203) Motor Corp. rose 4.9 percent in Tokyo after the Nikkei newspaper said the world’s biggest carmaker will post earnings that beat estimates. SJM Holdings Ltd. gained 3 percent in Hong Kong after Asia’s largest casino company reported higher first-quarter profit.

The MSCI Asia Pacific Index climbed 1.3 percent to 142.09 as of 6:20 p.m. in Tokyo, with more than two shares rising for each that fell. The gauge climbed 8.5 percent this year through yesterday amid optimism the Bank of Japan will deploy more measures to beat deflation and policy makers in the U.S. and Europe remain on standby to buoy growth.

“Investors like to be reassured from central banks that we are on the straight and narrow,” said James Lindsay, an Auckland-based fund manager at Tyndall Investment Management Ltd., which oversees about $23 billion. “Until economies really start to fire, I can’t see any pull-back of stimulus.”

Japan’s Nikkei 225 Stock Average (NKY) climbed 3.6 percent, trading above 14,000 for the first time since June 2008. The broader Topix Index jumped 3.1 percent to a level not seen since before Lehman filed for bankruptcy protection on Sept. 15, 2008. Japanese markets were closed yesterday for a holiday.

Malaysia Rallies

The FTSE Bursa Malaysia KLCI Index increased 1.4 percent, closing at a record high for a second day after Prime Minister Najib Razak’s election victory. Singapore’s Straits Times Index was little changed, while the Jakarta Composite Index advanced 1 percent.

New Zealand’s NZX 50 Index rose 0.6 percent. Hong Kong’s Hang Seng Index gained 0.6 percent and the Shanghai Composite Index added 0.2 percent. South Korea’s Kospi index lost 0.4 percent and Taiwan’s Taiex Index fell 0.1 percent.

Australia’s S&P/ASX 200 Index closed 0.2 percent lower, paring losses of as much as 0.7 percent before RBA Governor Glenn Stevens and his board reduced the benchmark interest rate to 2.75 percent, the lowest on record. Eight of 29 economists predicted the seventh cut in the past 19 months.

Shares on the MSCI Asia Pacific Index traded yesterday at 14.1 times estimated earnings compared with 14.7 for the Standard & Poor’s 500 Index and 13.1 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 were little changed today. The gauge gained 0.2 percent yesterday to a record, led by financial shares, after data last week showed American employers added more workers than forecast in April.

Nuclear Project

Mitsubishi Heavy climbed 4.9 percent to 684 yen in Tokyo. The company and France’s Areva won a $22 billion contract to build a nuclear-power plant in Turkey. Japan Steel Works Ltd. (5631), a supplier of nuclear reactor parts to Mitsubishi Heavy, jumped 16 percent to 579 yen.

Toyota advanced 4.9 percent to 5,760 yen. The company may tomorrow post full-year operating profit of about 1.3 trillion yen ($13 billion), the Nikkei reported. That compares with the average estimate of 1.24 trillion yen by 24 analysts in a Bloomberg survey.

LIXIL Group Corp., a supplier of aluminum doors and windows in Japan, added 3.8 percent to 2,293 yen after reporting full- year net income of 21.3 billion yen, exceeding its forecast for a 16.5 billion-yen gain.

Earnings Performance

Of the 249 companies on the MSCI Asia Pacific Index that reported their latest quarterly results since April 1, 49 percent beat analyst, according to data compiled by Bloomberg.

SJM Holdings rose 3 percent to HK$20.35 in Hong Kong. The company said first-quarter net income rose increased 12 percent from a year earlier to HK$1.92 billion ($247 million).

Gome Electrical Appliances Holding Ltd. (493), China’s second- biggest electronics retailer, gained 4.9 percent to 85 Hong Kong cents after saying it expects higher net income for the three months through March.

Among stocks that fell, Yue Yuen Industrial (Holdings) Ltd. (551), a supplier of shoes to Nike Inc. and Adidas AG, sank 12 percent to HK$23.80. The company said its first-quarter results showed a “significant downturn” compared with a year earlier and this could adversely affect interim performance.

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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