Asian stocks rose, driving a regional benchmark index to a 2 1/2-year high, as US earnings beat analyst estimates and amid speculation that China's steps to slow inflation won't curb its economic expansion.
Samsung Electronics, the world's biggest maker of televisions, climbed 2.3 per cent in Seoul. Honda Motor, which gets about 43 per cent of its revenue from North America, climbed 0.5 per cent in Tokyo. Komatsu, a Japanese maker of earthmoving machines that earns about 19 per cent of its revenue from China, rose 1.8 per cent, while BHP Billiton, the world's largest mining company, advanced 0.8 per cent in Sydney after metal prices rallied.
The MSCI Asia Pacific Index climbed 0.9 per cent to 140.21 as of 1:32 p.m. in Tokyo after Apple and International Business Machines Corp. reported earnings that exceeded analysts' estimates, and as speculation mounted that China will tomorrow report gross domestic product growth of more than 9 per cent.
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The gauge is set to close at its highest level since June 19, 2008.
"The earnings recovery in the U.S. has been exceptional post-crisis," said Prasad Patkar, who helps manage about $1.8 billion at Platypus Asset Management in Sydney.
"It seems the recovery in the US economy is starting to broaden, which will support revenue and earnings growth. China's economy is robust, but it'll take at least six months of strong data to silence those calling a policy-induced hard landing."
Quarterly earnings
About five stocks rose for every three that fell on the Asia-Pacific index, with material and energy companies advancing the most among the 10 industry groups it tracks.
Of the 22 companies represented on the gauge that have reported net income for the latest quarter, 11 have exceeded analyst estimates while eight have missed them, according to data compiled by Bloomberg.
Japan's Nikkei 225 Stock Average gained 0.3 per cent.
South Korea's Kospi Index climbed 0.8 per cent, Australia's S&P/ASX 200 Index increased 0.7 per cent, and Hong Kong's Hang Seng Index added 0.8 per cent.
Futures on the Standard & Poor's 500 Index were little changed today.
The US stock index rose 0.1 per cent yesterday in New York, extending a seven-week rally, as gains in commodity producers and a pledge by European finance chiefs to support the region overshadowed lower-than-estimated profit at Citigroup Inc.
IBM, the world's largest computer-services provider, posted fourth-quarter profit and sales that topped analysts' estimates as companies spent more on computer systems and software.
The shares climbed in late trading.
Apple exceeds estimates
After the close of regular New York trading, Apple, whose Chief Executive Officer Steve Jobs is taking medical leave, reported quarterly net income of $US6.43 a share, compared with $US5.41 a share estimated on average by analysts surveyed by Bloomberg.Samsung and Hynix Semiconductor Inc., the world's two largest makers of the chips, climbed in Seoul trading.
Samsung gained 2.3 per cent to 991,000 won and Hynix rose 0.5 per cent to 27,800 won.
Honda climbed 0.3 per cent to 3,330 yen in Tokyo, and Canon Inc., a Japanese camera maker that gets about 80 per cent of its revenue abroad, gained 0.4 per cent to 4,195 yen.
"The US market is still the bellwether in the world," said Jason Teh, who helps manage about $3.1 billion at Investors Mutual Ltd. in Sydney.
"A recovering US economy is good for the world given that the nation is the world's largest consumer."
Komatsu, the world's second-largest maker of construction and mining equipment, rose 1.8 per cent to 2,555 yen in Tokyo.
Hitachi Construction Machinery Co., the world's biggest maker of giant excavators, advanced 1.1 per cent to 2,042 yen.
China growth
Government reports tomorrow will probably show inflation in China cooled to 4.6 per cent in December while the economy likely expanded 9.4 per cent in the fourth quarter, according to the median estimates of economists surveyed by Bloomberg News.
BHP Billiton, which counts China as its largest market, rose 0.8 per cent to $45.99 in Sydney after a measure of metals traded in London rose 0.5 per cent yesterday and copper futures for March delivery climbed 0.4 per cent in New York.
Rio Tinto Group, the world's third-biggest mining company, gained 0.8 per cent to $87.53. Korea Zinc Co., the world's biggest producer of refined zinc, surged 4 per cent to 315,500 won in Seoul.
In Hong Kong, China Construction Bank Corp., the nation's second-largest lender advanced 1 per cent to $HK7.19 and smaller rival Bank of China Ltd. gained 1.7 per cent to $HK4.31.
China Shipping Container Lines Co., the nation's No. 2 carrier of sea-cargo boxes, climbed 3.1 per cent to $HK3.94 before trading in its shares was suspended pending an earnings statement.
The company late yesterday said 2010 profit was "better than expected" following a recovery in the global industry.
The MSCI Asia Pacific Index rose 14.3 per cent last year, compared with gains of 12.8 per cent by the S&P 500 and 8.6 per cent by the Stoxx Europe 600 Index.
Stocks in the Asian benchmark were valued at 14.3 times estimated earnings on average at the last close, compared with 13.6 times for the S&P 500 and 11.3 times for the Stoxx 600.
"Following macro improvements in the U.S. economy, micro factors such as an earnings recovery are beginning to show," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. "The opaque outlook for the economy is starting to clear."
Source: http://www.smh.com.au
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