Bloomberg News

Asian Stocks Pare Weekly Loss on U.S. Jobless Claims, Earnings

February 07, 2014

Hong Kong Stock Exchange

Traders work on the trading floor of the Hong Kong Stock Exchange in Hong Kong. Photographer: Lam Yik Fei/Bloomberg

Asian stocks rose, with the regional benchmark index paring its sixth straight weekly loss, as U.S. jobless claims fell and investors weighed company earnings.

Honda Motor Co., a Japanese carmaker that gets almost half its revenue in North America, added 2.9 percent. Sony Corp. climbed 4.1 percent in Tokyo after the electronics maker announced job cuts and a reorganization. Aurora Oil & Gas Ltd. surged 56 percent in Sydney after Baytex Energy Corp., a Canadian producer of heavy crude oil, agreed to buy the company. GS Engineering & Construction Corp. slumped 15 percent in Seoul after the contractor said it’s considering a share sale.

The MSCI Asia Pacific Index added 1.3 percent to 133.24 as of 8:57 p.m. in Hong Kong with all 10 industry groups rising. The measure has pared its weekly drop to 1.2 percent.

“Fundamentals still look good and the global economy is expected to grow faster this year than it did last year,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about A$170 billion ($152 billion). “That’s a positive environment.”

Japan’s Topix (TPX) index rallied 2.3 percent after the yen dropped 0.7 percent against the dollar yesterday. South Korea’s Kospi index added 0.8 percent. Australia’s S&P/ASX 200 Index added 0.7 percent as the reserve bank raised its economic growth and inflation forecasts. New Zealand’s NZX 50 Index advanced 0.7 percent as the market reopened following a holiday.

Regional Gauges

Hong Kong’s Hang Seng Index (HSI) rose 1 percent and the Hang Seng China Enterprises Index of mainland shares traded in Hong Kong rose 1.1 percent. Taiwan’s Taiex Index added 0.9 percent. Singapore’s Straits Times Index gained 0.8 percent. The Shanghai Composite Index increased 0.6 percent as China’s markets opened today after Lunar New Year holidays. Private data today showed China’s services activity expanded at a slower pace in January.

The MSCI Asia-Pacific gauge dropped 4.6 percent in January for its worst start to a year since 2009 as the Federal Reserve’s stimulus cuts and concern about China’s economic slowdown and volatility in developing markets spurred a global rout. About $2.3 trillion has been wiped from the value of stocks worldwide this year as of yesterday, according to data compiled by Bloomberg.

U.S. Futures

Futures on the Standard & Poor’s 500 Index advanced 0.4 percent today. The measure rose 1.2 percent yesterday, the biggest rally since Dec. 18, as claims for unemployment benefits fell and earnings from Walt Disney Co. to Akamai Technologies Inc. surpassed estimates.

Initial jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000 in the period ended Feb. 1, according to the Labor Department. The median forecast of economists surveyed by Bloomberg called for a decrease to 335,000.

The Labor Department may report today that U.S. nonfarm payrolls grew by 180,000 last month after a 74,000 gain in December, according to the median forecast of economists surveyed by Bloomberg.

Exporters to the U.S. gained, with Honda rising 2.9 percent to 3,680 yen. Yue Yuen Industrial Holdings Ltd., a shoemaker that gets about 29 percent of sales from the U.S., added 2.8 percent to HK$23.95. Samsung Electronics Co., a consumer-electronics maker that gets 22 percent of its revenue in America, climbed 1.3 percent to 1,275,000 won.

Earnings Results

Of the 286 companies on the MSCI Asia Pacific Index that have reported quarterly earnings since the beginning of January and for which estimates are available, 52 percent beat analyst estimates for profit, according to data compiled by Bloomberg.

Sony advanced 4.1 percent to 1,691 yen after announcing reorganization steps yesterday that include selling a personal-computer unit, cutting about 5,000 more jobs and splitting the TV business into a separate subsidiary.

Mitsui Chemicals Inc. gained 5.3 percent to 260 yen after saying it will restructure its business. The plan was “bolder” than expected and is positive for the share price, Credit Suisse Group AG said in a report.

Aurora Oil & Gas surged 56 percent to A$4.09 after Baytex Energy agreed to buy the company for C$1.8 billion ($1.63 billion) in cash to expand its U.S. shale portfolio, in the Canadian heavy-crude producer’s biggest purchase.

GS Engineering & Construction slumped 15 percent to 29,400 won as it considers a share sale. Details have yet to be decided, the company said in a regulatory filing. GS Engineering reported a fourth-quarter net loss of 206.1 billion won ($192 million).

The Asia-Pacific gauge traded at 12.4 times estimated earnings yesterday, compared with 15 for the S&P 500 and 13.8 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

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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