Asian Technology, Healthcare Stocks Gain; Steelmakers Decline

By Jonathan Burgos and Masaki Kondo

April 28 (Bloomberg) -- Asian technology and healthcare shares advanced, overshadowing declines among the region’s commodity producers.

Trend Micro Inc., the world’s third-biggest maker of security software, climbed 9.6 percent after first-quarter profit unexpectedly increased. Chugai Pharmaceutical Co., which sells the antiviral drug Tamiflu, gained 3.5 percent as the World Health Organization raised its pandemic alert level for swine flu. JFE Holdings Ltd., Japan’s No. 2 steelmaker, declined 2.9 percent in Tokyo after U.S. Steel Corp. reported a bigger- than-estimated loss.

“As earnings season kicks in, investors have become selective in their picks,” said Kazuki Miyazawa, a market analyst at Daiwa Securities SMBC Co. in Tokyo. “Companies that show no sign of bottoming will be dumped.”

The MSCI Asia Pacific Index was little changed at 89.25 at 10:02 a.m. in Tokyo. The measure has rallied 26 percent from a more than five-year low on March 9, taking valuations to the highest since November 2007.

Japan’s Nikkei 225 Stock Average rose 0.2 percent to 8,746.84. Australia’s S&P/ASX 200 Index gained 0.9 percent. Most markets open for trading in the region rose except Taiwan, Malaysia and the Philippines.

East Japan Railway Co., the nation’s largest rail operator, jumped 6.3 percent after saying it will buy back shares. Honda Motor Co., Japan’s second-biggest carmaker, gained 1.3 percent on a report it plans to expand ties with India’s Hero Group. National Australia Bank Ltd., the country’s biggest lender by assets, dropped 1.1 percent after its earnings fell.

Swine Flu

Futures on the Standard & Poor’s 500 Index lost 0.4 percent. The gauge dropped 1 percent in New York yesterday as concern the swine flu outbreak will hurt travel, energy and hotel companies overshadowed gains in healthcare stocks.

Trend Micro jumped 9.6 percent to 2,845 yen. Net income for the three months ended March 31 totaled 4.8 billion yen ($49.8 million), beating its forecast of 3.2 billion yen in profit, according to a preliminary earnings statement.

Kyocera Corp., which makes telecommunications and solar cell equipment, gained 1.9 percent to 7,340 yen. The company said yesterday it expects net income to rise 15 percent this year to 34 billion yen ($352 million).

Chugai Pharmaceutical gained 3.5 percent to 1,910 yen, adding to yesterday’s 14 percent surge, on speculation demand for its drugs will increase because of the swine flu outbreak. Takeda Pharmaceutical Co. added 1.7 percent to 3,500 yen.

The World Health Organization raised its pandemic alert level for swine flu, spurring concern the spread of the disease will hurt government efforts to revive the global economy.

Bad Debt

Korean Air Lines Co., South Korea’s largest airline, dropped 2 percent to 37,050 won. The company said yesterday it won’t cancel flights to Mexico, where flu-related deaths reached 149. Air China Ltd. lost 3 percent to 6.08 yuan in Shanghai.

“The influence of swine flu will likely continue to weigh on the market,” Mamoru Shimode, chief equity strategist at Tokyo-based Resona Bank Ltd., said in an interview with Bloomberg Television.

JFE Holdings lost 2.9 percent to 2,725 yen. BlueScope Steel Ltd., Australia’s largest steelmaker, slumped 2.7 percent to A$2.55. U.S. Steel reported a first-quarter net loss that was more than twice analysts’ estimates and cut its dividend as prices plunged.

East Japan Railway jumped 6.3 percent to 5,430 yen. JR East, as the company is also known, will repurchase up to 30 billion yen ($311 million) of its own shares between April 30 and May 29.

National Australia Bank

Honda Motor gained 1.3 percent to 2,700 yen. Honda and its joint venture Hero Honda Motors Ltd. may look at sharing details on new products including engines, designs and vehicle platforms, the Business Standard report, citing Shinji Aoyama, president of Heron Honda.

Honda’s fully owned unit Honda Motorcycle & Scooter India Pvt., competes with Hero Honda, in which the Japanese company and Hero each own a 26 percent stake.

National Australia Bank slumped 1.1 percent to A$21.79. The bank said first-half profit fell 0.9 percent to A$2.66 billion ($1.9 billion) as bad debts rose in an economy headed for its first recession in 18 years.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. Masaki Kondo in Tokyo at mkondo3@bloomberg.net;