Monday, September 13, 2010
Sept. 13 (Bloomberg) -- Asian stocks rose, driving up the MSCI Asia Pacific Index by the most in more than four months, after higher-than-forecast wholesale inventories in the U.S. and China's industrial output increased at a faster pace than economists estimated.
BHP Billiton Ltd., the world's largest mining company, gained 1.6 percent on speculation demand for commodities will increase. Hon Hai Precision Industry Co., the world's largest contract maker of electronics, jumped 6.5 percent in Taipei after saying sales in August surged. Mitsubishi UFJ Financial Group Inc. rose 2 percent in Tokyo after regulators reached an agreement on strengthening banks' capital standards in an effort to prevent a repeat of the financial crisis.
"The hard landing that investors had feared, such as going back into a recession, is now being taken out," said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which holds about $85 billion. "China is now just right. It's not too hot, and it's not too cool. It's just about fine tuning going forward."
The MSCI Asia Pacific Index gained 1.4 percent to 123.50 as of 4:01 p.m. in Tokyo, with seven stocks rising for every two that fell. The gauge is set to close at its highest level since May 4. The measure has climbed 6.6 percent from a one-month low on Aug. 25 amid speculation the U.S. will avoid slipping back into recession.
Japan's Nikkei 225 Stock Average and South Korea's Kospi index increased 0.8 percent. Australia's S&P/ASX 200 Index advanced 1.2 percent, while Hong Kong's Hang Seng Index climbed 2 percent. China's Shanghai Composite Index rose 0.9 percent as the yuan advanced to a record high.
Boosting Stockpiles
Futures on the Standard & Poor's 500 Index climbed 0.9 percent. The index gained 0.5 percent in New York on Sept. 10 after a government report showed inventories at U.S. wholesalers rose in July by the most in two years as a rebound in demand prompted companies to add to stockpiles.
In China, industrial production gained 13.9 percent in August from a year earlier, more than the 13 percent median estimate of 29 economists, a statistics bureau report showed in Beijing on Sept. 11. Consumer prices jumped 3.5 percent, the most in 22 months, as food costs climbed while retail sales increased 18.4 percent.
"The weekend data is encouraging in terms of helping ease market concerns about sharply slowing growth paired with inflation," said Howard Wang, head of the Greater China team at JF Asset Management Ltd., which oversees more than $50 billion. "The economic indicators and property market in the next two months are key."
Copper, Oil
Gauges of energy and raw-material producers in the MSCI Asia Pacific Index rose at least 1.6 percent as copper futures in New York climbed 1.8 percent in after-hours trading and crude oil jumped 1.3 percent.
BHP rose 1.6 percent to A$38.56 in Sydney and was the biggest contributor to the MSCI Asia Pacific Index's advance. Rio Tinto Group, the world's third-biggest mining company, climbed 1.4 percent to A$75.30. Inpex Corp., Japan's largest oil and gas explorer, increased 2.2 percent to 417,500 yen in Tokyo.
China's industrial production data add to recent reports that stoked optimism about the country's economy. The nation's manufacturing industry grew at a faster pace in August, a government-backed report on Sept. 1 showed. China's passenger- car sales to dealerships jumped 18.7 percent last month, the China Association of Automobile Manufacturers said on Sept. 9.
"Concerns are easing about the future of the global economy," said Toshiyuki Kanayama, a market analyst at Tokyo- based Monex Inc. "Investors may buy stocks such as exporters and resource producers that are sensitive to trends in the global economy."
Biggest Market
A gauge of industrial companies in the MSCI Asia Pacific Index, which includes trading houses, machinery makers and railway companies, advanced 1.2 percent.
Komatsu Ltd., which counts China as its biggest market, rose 1.3 percent to 1,851 yen in Tokyo. Fanuc Ltd., the robotics maker which counts Asia excluding Japan as its biggest market, gained 1.6 percent to 9,850 yen.
"The data adds to confidence that China's growth will stay at a sustainable rate," said AMP's Oliver. "There's no need for aggressive tightening and this shows no case for overall tightening policy."
Beijing Wangfujing Department Store (Group) Co. surged 3.9 percent to 48.50 yuan in Shanghai. Suning Appliance Co., China's biggest home appliance retailer by market value, gained 3.5 percent to 15.55 yuan.
Growth Concerns
The MSCI Asia Pacific Index has slumped 4.3 percent from this year's high on April 15 on concern a faltering U.S. economy and China's steps to curb property prices will slow global economic growth.
Stocks in the MSCI Asia Pacific Index are valued at an average 14 times estimated earnings, higher than the S&P 500 Index's 13.3 times and 11.9 times for the Stoxx Europe 600 Index.
A measure of the index's technology shares advanced 1.7 percent, the second-biggest gain among the broader gauge's industry groups. In Taipei, Hon Hai jumped 6.5 percent to NT$115 after saying non-consolidated sales almost doubled in August from a year earlier. The company's Foxconn International Holdings Ltd. affiliate gained 2 percent in Hong Kong.
Finance companies were the biggest contributors to the MSCI Asia Pacific Index's advance as regulators looking to rein in risk-taking reached a compromise in Switzerland yesterday that more than doubles capital requirements for the world's banks.
Mitsubishi UFJ, Japan's biggest lender, rose 2 percent to 411 yen in Tokyo. Commonwealth Bank of Australia, the nation's biggest bank, gained 1.6 percent to A$53.51 in Sydney. HSBC Holdings Plc, Europe's biggest bank, increased 1.7 percent to HK$80.50 in Hong Kong.
Basel Agreement
The Basel Committee on Banking Supervision said it will require lenders to have common equity equal to at least 7 percent of assets. Banks that fail to meet the buffer would be unable to pay dividends, though not forced to raise cash, the board of governors said. The committee will give lenders as long as eight years to comply.
"This was anticipated and it's already been priced into the shares," said AMP's Oliver. "They give up to eight years before banks have to comply, which is longer than had been thought originally."
--With assistance from Chua Kong Ho in Shanghai, Satoshi Kawano and Norie Kuboyama in Tokyo. Editors: Darren Boey, Sam Waite.
From San Francisco Chronicle published on Monday, September 13, 2010