BL: Asia Stocks Gain a 5th Day, Metals, Oil Rise on U.S. Optimism
By Rocky Swift and Yoshiaki Nohara
June 16 (Bloomberg) -- Asian stocks rose for a fifth day and metals advanced as economic reports added to optimism a U.S. recovery will support global growth.
The MSCI Asia Pacific Index climbed 1.1 percent to 115.64 at 4 p.m. in Tokyo, set for the highest close since May 18. Advancers led decliners 5 to 1. The Stoxx Europe 600 increased 0.5 percent to 255.60 at 8 a.m. in London. Copper headed for its longest winning streak in 11 months and oil traded near a one- month high. Standard & Poor’s 500 Index futures fell 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 propel 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. “Risk sentiment is improving 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 1.8 percent, the biggest increase among equity benchmarks in the Asia-Pacific region. South Korea’s Kospi Index advanced 0.9 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 more than 10 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., which gets about 28 percent of sales from North America, increased 1.2 percent in Tokyo. Samsung Electronics Co., a chipmaker that reaps 20 percent of revenue in America, rose 2.6 percent in Seoul. Nintendo Co. jumped 5.2 percent after it introduced a handheld 3-D video-game player.
Companies that produce materials led gains among the MSCI gauge’s 10 industry groups. BHP Billiton Ltd., the world’s largest mining company, rose 2.2 percent in Sydney and was the biggest contributor to the index’s increase. Rio Tinto Group, the world’s third-ranked mining company, increased 2.8 percent. Mitsubishi Corp., which gets 40 percent of sales from commodities, gained 2.3 percent in Tokyo.
Copper’s Winning Streak
Copper advanced for a seventh day, the longest streak since July 2009. Three-month copper on the London Metal Exchange gained as much as 1.4 percent to $6,770 a metric ton. Among other LME-traded metals, aluminum rose 1.2 percent to $2,037 a ton, zinc increased 1.2 percent to $1,861.50 a ton and nickel added 1.1 percent to $20,440 a ton.
“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 a report today. “Strong gains on international equity markets imparted a positive spin on base metal market sentiment.”
Crude oil traded near a one-month high in New York at $76.92 a barrel, after jumping 2.4 percent yesterday as gains in U.S. equities restored confidence that fuel demand will increase.
“The indexes in the U.S. are getting better so everyone is thinking that crude oil demand will increase,” said Ken Hasegawa, a manager for commodity derivative sales at broker Newedge in Tokyo. “Oil is trading in a range. Up or down depends on the financial markets so one has to see the movements of the euro and the stock markets.”
Takeover Target
Woori Finance Holdings Co. advanced 3.3 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.
South Korea’s won rose 1.4 percent to 1,210.75 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 0.6 percent to 46.156 per dollar as the central bank said overseas remittances increased 5.4 percent in April from a year earlier.
“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.”
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 9 basis points to 127 basis points, according to Nomura Holdings Inc. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan declined 8 basis points to 130 basis points, Royal Bank of Scotland Group Plc prices show.
To contact the reporters on this story: Rocky Swift in Tokyo at rswift5@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net.
Last Updated: June 16, 2010 03:01 EDT
