Asian stocks rose, with the regional benchmark index advancing for the eighth day in nine, as a stronger dollar boosted earnings prospects for exporters and reports in the U.S. signaled a broadening of the economic recovery.
Honda Motor Co., Japan’s No. 2 automaker by sales that counts the U.S. as its biggest market, gained 1.3 percent in Tokyo. Hyundai Motor Co., South Korea’s biggest carmaker, rose 2.4 percent in Seoul. Canon Inc., a Japanese camera maker that generates about 80 percent of its revenue overseas, rose 1.2 percent after the dollar surged against the yen, boosting the outlook for export earnings. Mitsui & Co., which gets about 40 percent of gross profit from commodities, advanced 2.1 percent after crude oil and copper futures increased.
“There are mounting expectations about an economic recovery in the U.S.,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “Investors have their eyes on the favorable factors. Excess liquidity is boosting demand for commodities.”
The MSCI Asia Pacific Index climbed 0.4 percent to 137.71 as of 11:38 a.m. in Tokyo. Five stocks advanced for every four that dropped on the gauge. The index rose 14 percent last year, extending a 34 percent increase in 2009, as positive global economic data and corporate profits outweighed concerns about Europe’s debt crisis and China’s steps to curb inflation.
Japan’s Nikkei 225 Stock Average increased 1.2 percent. Singapore’s Straits Times index gained 0.3 percent and Hong Kong’s Hang Seng Index was little changed. China’s Shanghai Composite Index dropped 0.7 percent and Australia’s S&P/ASX 200 Index slipped 0.4 percent.
U.S. Services, Jobs
Futures on the Standard & Poor’s 500 Index were little changed today. The index rose 0.5 percent in New York yesterday to its highest level since September 2008.
The U.S. Institute for Supply Management said yesterday that its non-factory index, which covers about 90 percent of the economy, rose to 57.1 in December, exceeding the median forecast of economists surveyed by Bloomberg News and the fastest expansion since May 2006. A reading higher than 50 signals growth. ADP Employer Services said yesterday that U.S. companies added 297,000 jobs last month, almost triple the median economist estimate.
Gauges of consumer discretionary stocks as well as industrial and information technology companies had the biggest increase among the 10 industry in the MSCI Asia Pacific Index.
Honda climbed 1.3 percent to 3,245 yen in Tokyo. Toyota Motor Corp., the world’s biggest carmaker, advanced 2.3 percent to 3,370 yen. Hyundai Motor gained 2.4 percent to 193,500 won in Seoul.
Auto Rally
Asian carmarkers also gained after the Federal Chamber of Automotive Industries in Australia reported sales of new vehicles increased 10 percent in 2010 to 1.036 million from the previous year.
Mazda Motor Corp., Japan’s fifth biggest automaker by sales, advanced 2.5 percent to 248 yen. The company sold 239,709 vehicles in China last year, an increase of 33 percent from 2009, according to a statement on its website.
Fuji Heavy Industries Ltd., owner of the Subaru auto brand, climbed 3.8 percent to 683 yen after Goldman Sachs Group Inc, increased its rating to “buy” from “neutral.”
Japanese exporters also increased after the dollar gained the most in three months against the yen yesterday in New York, advancing to as much as 83.38, the highest level since Dec. 23. A stronger dollar boosts the value of U.S. income at Japanese companies when revenue is repatriated.
Canon, the world’s biggest camera maker, gained 1.2 percent to 4,265 yen in Tokyo. Nintendo Co., the maker Wii gaming consoles, climbed 2 percent to 23,330 yen. Fanuc Corp., Japan’s largest maker of industrial robots, advanced 2.6 percent to 12,960 yen.
‘Business Confidence’
Nikon Corp., Japan’s second biggest camera maker by sales, increased 4.4 percent to 1,834 yen. The company expects operating profit from its precision equipment operations will reach 28 billion yen in fiscal year 2012, seven times the amount forecast for the current year, the Nikkei newspaper reported.
“Investors are taking business confidence as being on a recovery track because economic measures are good in general,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “A global pickup in business sentiment is boosting actual demand for commodities.”
Mitsui & Co. gained 2.1 percent to 1,418 yen. Mitsubishi Corp., which gets about 40 percent of sales from commodities, increased 2.2 percent to 2,380 yen. Woodside Petroleum Ltd., Australia’s second-biggest oil producer, climbed 1.1 percent to A$42.83.
Crude oil for February delivery increased to $90.30 a barrel in New York yesterday. Copper futures for March delivery rose 0.9 percent to close at $4.408 a pound yesterday.
Shares on MSCI Asia Pacific Index were valued at 14.1 times estimated earnings on average at yesterday’s close, compared with 13.5 times for the S&P 500 and 11.1 times for the Stoxx 600.
Source: http://www.bloomberg.com
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