Asian stocks rose for a fifth day, and metals and the dollar advanced as economic reports added to optimism a U.S. recovery will support global growth.
The MSCI Asia Pacific Index climbed 0.9 percent to 115.46 at 11:50 a.m. in Tokyo, set for the highest close since May 18. The dollar strengthened versus 12 of 16 major counterparts. Copper headed for its longest winning streak in 11 months and oil rose for a third day. Standard & Poor’s 500 Index futures slipped 0.2 percent.
Economists said a report today will show U.S. industrial production expanded in May by the most in four months, adding to evidence the global recovery may shrug off Europe’s debt crisis. The Federal Reserve Bank of New York said yesterday its manufacturing gauge advanced for an 11th month, helping send the S&P 500 index up 2.4 percent yesterday.
“Stocks seem to have become more resilient after taking into account a lot of negative factors,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest bank. “Risk sentiment is improving somewhat as economies in the U.S. and China seem to be holding steady, easing concern about a double dip.”
Japan’s Nikkei 225 Stock Average rose 1.6 percent, the biggest increase among equity benchmarks in the Asia-Pacific region. South Korea’s Kospi Index advanced 0.4 percent and Australia’s S&P/ASX 200 gained 1.1 percent. Markets in Hong Kong, China and Taiwan are closed today for a holiday.
Relative Value
MSCI’s Asian gauge has slumped 11 percent from its 52-week high on April 15 as swelling budget deficits prompted credit downgrades of Greece, Spain and Portugal. The retreat has driven down the average price of shares in the gauge to 14.8 times estimated earnings. The ratio sank to 13.8 times on May 18, the lowest level since December 2008.
Toyota Motor Corp., a carmaker that gets about 28 percent of its sales from North America, increased 1.4 percent in Tokyo. Samsung Electronics Co., a chipmaker that earns about 20 percent of its revenue in America, rose 1.8 percent in Seoul. Nintendo Co. jumped 4.7 percent in Osaka, Japan, after the company introduced a handheld video-game player.
Material and information-technology companies led gains today among the MSCI gauge’s 10 industry groups. BHP Billiton Ltd., the world’s largest mining company, rose 2.1 percent in Sydney and was the biggest contributor to the index’s increase. Rio Tinto Group, the world’s third-ranked mining company, increased 2 percent. Mitsubishi Corp., which gets about 40 percent of sales from commodities, gained 2.1 percent in Tokyo.
Copper’s Winning Streak
Copper advanced for a seventh day, the longest streak since July 2009. Oil extended yesterday’s 2.4 percent increase, trading at $77.16 a barrel in New York.
“Market worries about some of the more pessimistic economic scenarios appear to have abated,” David Moore, commodity strategist at Commonwealth Bank of Australia, wrote in an e-mailed report today. “Strong gains on international equity markets imparted a positive spin on base metal market sentiment.”
Three-month copper on the London Metal Exchange gained as much as 1.3 percent to $6,763.75 a metric ton in Singapore. Among other LME-traded metals, aluminum rose 0.7 percent to $2,025 a ton, zinc increased 0.7 percent to $1,852 a ton and nickel added 1.1 percent to $20,450 a ton.
Woori Finance Holdings Co. advanced 4 percent after it was named as a potential takeover target by the chairman-nominee at KB Financial Group Inc., owner of the nation’s biggest lender. Euh Yoon Dae, nominated as chairman of KB Financial yesterday, discussed potential bids for companies including Woori with a panel that recommended him to the post, committee head Lim Suk Sig said.
Korean Inflows
South Korea’s won rose 1.2 percent to 1,212.95 per dollar, reaching its highest level in almost two weeks, as overseas investors added to their holdings of Korean shares for a fourth day. The Philippine peso climbed 0.7 percent to 46.20 per dollar before the central bank announces figures for remittances from overseas workers for April.
“We’re seeing some positive signs from Europe, but we’re still being cautious,” said Jae Sung Park, a currency dealer at Woori Investment & Securities. It will be hard for the won to trade below 1,200 against the dollar today “because the authorities will want to intervene at that level.”
The U.S. currency gained as much as 0.2 percent to 91.53 yen in Tokyo. The greenback traded at $1.2312 per euro from $1.2332 in New York yesterday, snapping a two-day loss against the common currency.
Industrial Output
Output at U.S. factories, mines and utilities increased 0.9 percent in May, the most since January, after a 0.8 percent gain in April, according to a Bloomberg News survey before the Federal Reserve report today. The Fed Bank of New York said yesterday its Empire State Index of manufacturing in the region rose to 19.57 in June from 19.11 the previous month.
The cost of protecting Asia-Pacific corporate and sovereign bonds from non-payment fell, according to traders of credit- default swaps.
The Markit iTraxx Australia index dropped 7 basis points to 128.5 basis points, according to Nomura Holdings Inc. The index for Japan fell 6 basis points to 138 basis points as of 8:44 a.m. in Tokyo, according to Morgan Stanley prices.
The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan declined 5 basis points to 133 basis points, Royal Bank of Scotland Group Plc prices show. A basis point is 0.01 percentage point.
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