By Patrick Rial and Shani Raja
June 30 (Bloomberg) -- Asian stocks rose, with the regional benchmark index set for a record quarterly gain, on optimism a recovery in the global economy will lift earnings for producers of commodities and electronics.
Rio Tinto Group, the world’s No. 3 mining company, climbed 3.7 percent as copper headed for its best six months in 22 years. David Jones Ltd., Australia’s No. 2 department store, soared 11 percent after raising its profit estimate, while NEC Electronics Corp. jumped 3.1 percent on comments by its president that “the worst is over.” Fujifilm Holdings Corp. and Nikon Corp., which get more than half their revenue overseas, rallied more than 6 percent after Mizuho Securities Co. rated them “strong buy”
The MSCI Asia Pacific Index advanced 1.2 percent to 103.89 as of 1:27 p.m. in Tokyo. The index is set for a 28 percent gain for the past three months, the biggest quarterly rally since the gauge started in 1988, as economic indicators pointed to an easing of the global recession.
“You’re seeing a clear improvement in macro indicators pointing to a recovery later in the year,” said Nader Naeimi, a strategist at AMP Capital Investors in Sydney, which manages about $95 billion. “A falling yen signals that risk appetite is returning, which is good for equities.”
Companies on the MSCI Asia trade at 23.8 times estimated net income, making stocks in the region more expensive than in Europe and North America. MSCI’s Asian gauge is also set for its best first half since 1999 with a 16 percent advance.
Top Gainer
Taiwan’s Farglory Land Development Co. rose 195 percent this quarter, the leading stock on the MSCI Asia. Warming relations between Taiwan and China fueled speculation mainland companies will be able to invest in Taiwanese real estate, lifting shares in the developer and its peers.
Japan’s Nikkei 225 Stock Average climbed 2 percent to 9,975.21 today as the government said household spending unexpectedly increased in May, even as unemployment reached a five-year high. Shares rose in most markets open for trading in the region, except in the Philippines, China and Vietnam.
India’s Sensex Index has trailed only Vietnam in gains this quarter with a 52 percent surge, the most since 1992. An election victory by India’s ruling party in May has spurred optimism economic reforms will follow and keep the world’s No. 2 most populous nation expanding. Jaiprakash Associates Ltd., India’s largest builder of dams, is the biggest winner on the Sensex this year, having risen 165 percent.
The outlook for emerging markets is “far more optimistic” than for developed economies, investor Marc Faber said at a conference in Seoul today. Faber also recommended investments in commodities and tourism industries.
Commodities Rise
Futures on the Standard & Poor’s 500 Index were little- changed. The gauge added 0.9 percent in New York yesterday on the back of a 3.4 percent increase in the price of crude oil.
Copper gained as much as 1 percent today, bringing its first-half surge to 68 percent, the best six-month rally in 22 years. and the Baltic Dry Index, a measure of shipping costs for commodities, added 0.8 percent, the first climb in seven days.
Rio Tinto increased 3.7 percent to A$52.15. Inpex Corp., Japan’s biggest oil explorer, jumped 4.6 percent to 769,000 yen. China Petroleum & Chemical Corp., also known as Sinopec, added 4.7 percent to HK$5.99 after the country lifted fuel prices by as much as 11 percent to allow refiners to stay profitable.
Earnings Revision
David Jones rallied 11 percent to A$4.58 after saying profit will rise by 20 percent to 30 percent in the six months ending July 25, compared with an earlier forecast for earnings to be little changed. Harvey Norman Holdings Ltd., Australia’s biggest electronics retailer, soared 9.9 percent to A$3.34. Credit Suisse Group AG raised ratings on both companies, citing an expected recovery among Australian discretionary retailers.
NEC Electronics, Japan’s fourth-largest chipmaker, gained 3.4 percent to 871 yen. President Junshi Yamaguchi said “the worst is over,” and orders probably jumped 150 percent in the current quarter as companies rebuilt inventories. Elpida Memory Inc., Japan’s largest computer memory maker, gained 2.7 percent to 1,059 yen after saying it will get 50 billion yen ($521 million) from the Japanese government and a Taiwanese partner.
Fujifilm, the world’s second-largest maker of camera film, surged 6.5 percent to 3,050 yen. Nikon, the world’s largest maker of machines that etch circuitry onto silicon wafers, jumped 6.2 percent to 1,671 yen.
Ryosuke Katsura, an analyst at Mizuho Securities in Tokyo, lifted shares of both companies two levels to “strong buy” from “hold.”
Pumpkin Patch
Pumpkin Patch Ltd. jumped 8.2 percent to NZ$1.46 after New Zealand’s second-largest publicly traded retailer said it plans to shut 20 of its 35 stores in the U.S. to reduce losses.
Japanese consumer lender Aiful Corp. surged 24 percent to 384 yen after Goldman Sachs Group Inc. boosted the stock to “buy” from “neutral.” The shares, trading at 0.2 times book value, are overly cheap, Goldman Sachs analyst Takehito Yamanaka wrote in a report.
To contact the reporters for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
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