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| Asian stocks rise on Japan, China data |
| Bloomberg / Nov 12, 2009, 00:08 IST |
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Asian stocks and currencies rose as Japan’s machinery orders surged, China’s industrial production accelerated and South Korea’s unemployment fell.
The MSCI Asia-Pacific Index advanced 0.5 per cent to 118.65 as of 1:46 pm in Tokyo, extending its four-day rise to 3.4 per cent. The Japanese yen climbed on confidence exports will pick up as Asian growth accelerates, while gold futures extended gains to an eighth day. China’s Shanghai Composite Index reversed gains as lending growth slowed in October.
HSBC Holdings Plc led the advance in Hong Kong after saying third-quarter profit was “surprisingly ahead” of its projections. Nippon Telegraph & Telephone Corp, Japan’s former telephone monopoly, rose after Goldman Sachs Group Inc recommended buying the shares.
“Asian economies are set to recover ahead of other regions,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments, which manages the equivalent of $38 billion. “That’s the reason why exports and industrial production are improving so quickly. Next year’s growth will be led by Asian economies.”
US Treasuries weren’t traded today as the market closed for the Veteran’s Day holiday. Federal Reserve Bank of Dallas President Richard Fisher said yesterday the most likely outcome for the US “is for growth to be suboptimal, unemployment to remain a vexing problem and inflation to remain subdued.”
Treasury Secretary Timothy Geithner said a strong dollar was in the nation’s interest and the government recognised the importance it played in the global financial system.
Oil traded near $79 a barrel after American Petroleum Institute said late yesterday that US crude and fuel stockpiles rose, outweighing signs of economic expansion. Crude oil for December delivery traded at $78.86 a barrel, down 19 cents, in electronic trading on the New York Mercantile Exchange.
Orders for Japanese machinery, an indicator of business investment intentions, climbed 10.5 per cent in September, while economists had forecast a 4.1 per cent increase. Mori Seiki Co, a maker of precision lathes, advanced 0.8 per cent to 911 yen. Fanuc Ltd, the world’s largest maker of industrial robots, climbed 0.4 per cent to 7,650 yen.
“The bottom is probably behind us for capital spending,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. “The retrenchment phase is over and the corporate sector as a whole should gradually pick up in a self-sustained way.”
South Korea’s unemployment rate fell to the lowest level in nine months as transport and telecommunications companies and banks hired more workers, a further sign the nation’s economy is recovering. The Kospi index rose 0.4 per cent, after falling as much as 0.5 per cent, while the won approached a 13-month high.
China’s Shanghai Composite retreated 0.7 per cent to 3,160.00, dropping for the first time in nine days as a slowdown in the nation’s lending growth sent banks and developers lower. New loans declined to 253 billion yuan ($37 billion) last month from 516.7 billion yuan in September, the People’s Bank of China reported today, less than 370 billion yuan predicted by economists in a Bloomberg News survey.
The Shanghai gauge increased as much as 0.3 per cent earlier after the nation’s industrial production rose 16.1 per cent from a year earlier in October, the most since March 2008. Retail sales gained an annual 16.2 per cent last month.
“It’s probably the start of the monetary tightening,” said Zhao Zifeng, who helps oversee about $10.2 billion at China International Fund Management Co in Shanghai. “Optimism about the economy is already priced in.”
Japan and China’s economic data also drove Asian currencies higher, raising optimism the region’s growth will spur demand for higher-yielding assets. The dollar traded near a 15-month low against the currencies of six major US trading counterparts.
The Japanese yen strengthened for a second day against the dollar after the nation’s machine orders rose more than forecast, adding to evidence the economic recovery is gathering momentum.
“The data were a surprise,” said Koji Fukaya, a senior currency strategist in Tokyo at Deutsche Bank AG. “Improving risk appetite may weigh down on the dollar.”
The yen rose to 89.34 a dollar in Tokyo, after earlier touching 89.32, the strongest since November 2. The won climbed 0.2 per cent to 1,159.45, according to Seoul Money Brokerage Services, while the Philippine peso advanced as much as 0.4 per cent to 46.715 and last traded at 46.885.
Daikin Industries, the world’s No 2 air conditioner maker, jumped 3.5 per cent after lifting its annual profit forecast due to an improved outlook for sales in China.
HSBC, Europe’s biggest bank, jumped 4.1 per cent to HK$92.35, after it said third-quarter pretax profit was “significantly” higher than a year earlier.
“Most of the markets have done better than what we expected,” Asia-Pacific Chief Executive Officer Sandy Flockhart said in an interview with Bloomberg Television in Hong Kong today. “Our businesses in Asia, Middle East and Latin America have performed well while the impairment situation in the US is getting better.”
Gold futures in New York increased for an eighth-straight session today in after-hours trading, rising 0.5 percent to $1,107.60 an ounce. Newcrest Mining Ltd, Australia’s largest gold producer, gained 0.5 percent.
NTT rallied 4.5 percent to 3,750 yen after the stock was added to Goldman Sachs Group Inc’s “conviction buy” list as the company is likely to buy back shares from the government amid improving profitability. Yakult Honsha Co, health drink maker, rallied 5.4 per cent to 2,545 yen after Nomura Holdings Inc. boosted the shares to “neutral” from “reduce,” citing growth in the Chinese market.
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