Bloomberg News

Asia Stocks Rise as U.S. Housing Data Eases Fed Stimulus Concern

August 26, 2013

Asian Stocks Rise as U.S. Housing Data Eases Fed Easing Concerns

A man walks past an electronic monitor displaying the closing figure of the Nikkei 225 Stock Average, center top, outside a securities firm in Tokyo. Photographer: Yuriko Nakao/Bloomberg

Asian stocks rose for a second day after a slump in U.S. home sales eased speculation the Federal Reserve will reduce economic stimulus next month.

Belle International Holdings Ltd., a retailer of woman’s footwear, advanced 5.6 percent in Hong Kong after reporting first half-net income. Newcrest Mining Ltd. jumped 4.9 percent, leading a surge in Australian gold producers after the price of the precious metal rose above $1,400 an ounce last week. Tokyo Electric Power Co. slumped 6.9 percent in Tokyo after saying one of two irradiated water filters at its wrecked nuclear plant in Fukushima will be shut until at least September.

The MSCI Asia Pacific Index advanced 0.1 percent to 131.46 as of 7:27 p.m. in Tokyo, with eight of the gauge’s 10 industry groups rising.

“Any disappointing economic reading out of the U.S. will be interpreted as a sign that perhaps the economy is not ready for tapering in September and perhaps the Fed may hold off,” said Stan Shamu, a strategist at IG Ltd. in Melbourne. “It’s all about picking stocks with right fundamentals.”

The MSCI Asia Pacific Index fell 2.2 percent last week, paring its gain this year through Aug. 23 to 1.6 percent. The advance lags a 17 percent surge in the Standard & Poor’s 500 Index as growth slows in China and speculation that the Fed will curb stimulus spurred investors to sell assets across Asia and emerging markets.

The Asia Pacific index traded at 12.8 times estimated earnings on Aug. 23 compared with 15.1 for the S&P 500 Index and 13.9 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Topix Drop

Japan’s Topix index slid 0.1 percent after swinging between gains and losses. Australia’s S&P/ASX 200 rose 0.2 percent, and New Zealand’s NZX 50 Index gained 0.5 percent. South Korea’s Kospi Index increased 1 percent.

Hong Kong’s Hang Seng Index advanced 0.7 percent, climbing from its biggest weekly decline in two months. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 1.9 percent. Taiwan’s Taiex Index added 0.3 percent, and Singapore’s Straits Times Index dropped 0.1 percent for an eighth day of losses.

Futures on the S&P 500 slid 0.1 percent today. The measure rose 0.4 percent on Aug. 23, when data showed new home purchases in the U.S. plunged in July by the most in three years. Investors are weighing when the Fed will start reining in $85 billion of monthly asset purchases.

Emerging Markets

The risk that the Fed’s trimming of bond buying will hurt economies from India to Turkey by sparking an exodus of cash and higher borrowing costs was a dominant theme at an annual meeting of central bankers and economists in Jackson Hole, Wyoming, that ended Aug. 24.

An index of emerging-market stocks last week fell 2.7 percent, the steepest decline in two months, compared with a 0.5 percent gain in the S&P 500. Such selloffs aren’t an issue for Fed officials, who said their sole focus is the U.S. economy as they consider when to start tapering asset purchases.

Belle International advanced 5.6 percent to HK$11 after closing at a seven-week low last week. The company reported first-half net income of 2.17 billion yuan after the close on Aug. 23 versus an estimated 2.2 billion yuan.

Newcrest Mining rose 4.9 percent to A$13.70 in Sydney trading to lead gains by gold producers after the metal touched its highest level in more than two months. Perseus Mining Ltd. gained 5.1 percent to 82 Australian cents. Zhaojin Mining Industry Co. jumped 8 percent to HK$7 in Hong Kong.

Tokyo Electric slid 6.9 percent to 473 yen, the lowest since May 13, as it searches for the cause of a leak at the Fukushima plant that prompted the biggest escalation in the nuclear crisis since the March 2011 disaster. Shutting one of the two water filters compounds concern the utility is losing its two-year battle to manage the buildup of contaminated water at the Fukushima station.

BYD Co., the Chinese automaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., slumped 12 percent to HK$28.45 in Hong Kong after predicting the smallest quarterly profit in a year.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net


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