By Jonathan Burgos and Masaki Kondo
June 26 (Bloomberg) -- Asian stocks rose as Bridgestone Corp. narrowed its loss forecast, commodity prices jumped and a government report showed the U.S. economy shrank less than expected in the first quarter.
Bridgestone, the world’s largest tiremaker, climbed 8.5 percent in Tokyo. Alumina Ltd., partner in the world’s biggest producer of the material used to make aluminum, surged 9.1 percent in Sydney. Nippon Electric Glass Co., the world’s No. 3 maker of glass for flat-panel televisions, gained 6.3 percent after increasing its earnings estimate.
“Bridgestone’s forecast gave us evidence that company earnings will start to rebound,” said Naoki Fujiwara, who oversees the equivalent of $3.7 billion at Shinkin Asset Management Co. in Tokyo. “Investors still believe the global economy will start to recover later this year and this confidence is leading to resilience in the market.”
The MSCI Asia Pacific Index gained 1.2 percent to 103.07 as of 3:12 p.m. in Tokyo. The increase took the measure’s weekly advance to 1.6 percent, recouping some of last week’s 3.5 percent drop. Optimism government stimulus measures worldwide will revive the global economy has boosted the gauge by 46 percent from a more than five-year low on March 9.
Japan’s Nikkei 225 Stock Average added 0.8 percent to 9,877.39, led by Furukawa Electric Co., which jumped 6 percent after Morgan Stanley raised its share-price estimate. Japanese stocks rose even as a government report showed the country’s consumer prices fell at a record pace in May.
Hong Kong’s Hang Seng Index gained 1.2 percent, with China Cosco Holdings Co. climbing 6.9 percent after its chairman said freight rates are set to advance. China’s Shanghai Composite Index added 0.2 percent as the country’s statistics bureau said industrial companies’ profits fell at a slower pace.
Slower Contraction
Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The gauge increased 2.1 percent, the most since June 1, in New York. A government report showed gross domestic product shrank by 5.5 percent last quarter, less than the 5.7 percent decrease forecast by economists. That data countered a separate report showing jobless claims unexpectedly rose last week.
The MSCI Asia Pacific Index’s gain this week, the fifth advance in six weeks, came amid signs the global economy is strengthening. The U.S. Federal Reserve said the pace of economic contraction is slowing, while South Korea raised its gross domestic product forecast. Singapore’s industrial production increased in May, a government report today showed.
“Uncertainty over the global economy has receded,” said Kazuhiro Takahashi, a general manager at Tokyo-based Daiwa Securities SMBC Co. “Business conditions aren’t as bad as some have feared and I’m expecting companies to lift their targets.”
Copper, Oil Prices
Bridgestone jumped 8.5 percent to 1,520 yen. The company narrowed its first-half net loss forecast to 46 billion yen ($480 million) from 62 billion yen, citing reduced costs.
Nippon Electric Glass surged 6.3 percent to 1,054 yen. The company said yesterday operating profit will likely be 10 billion yen in the three months to June 30, twice its previous forecast. Demand for LCD glass is expected to remain “robust,” the company said in a filing to the exchange.
Australia’s Alumina gained 9.1 percent to A$1.505. Komatsu Ltd., which gets 86 percent of sales supplying mining and construction machinery, added 1.6 percent to 1,530 yen.
A gauge of six primary metals in London advanced for a third day to the highest level in two weeks. Copper futures for September delivery rose 1.5 percent in New York.
Rising Valuations
Inpex Corp., Japan’s largest oil explorer, added 1.8 percent to 754,000 yen. Woodside Petroleum Ltd., Australia’s second-largest oil producer, rose 1.8 percent to A$42.80. Crude oil jumped 2.3 percent to $70.23 a barrel in New York yesterday, a level not seen since June 18. Futures gained 0.8 percent in after-hours trading.
Materials and energy companies are the MSCI Asia Pacific Index’s best performing industry groups this year on speculation a global economic recovery will boost demand for commodities.
The rally since March drove the average valuation of companies in the gauge to 1.5 times the net value of assets as of June 12, according to Bloomberg data. That was the highest level since Sept. 26. The gauge sank 3.5 percent last week, its first weekly drop in five.
“I see this as a very strong bear market rally,” said Hugh Young, who helps oversee $30 billion as Asian managing director for Aberdeen Asset. “We fully admit that things have stopped plunging and that in a sense the way business is done has normalized, but most of the companies we have contact with are saying business is still very, very tough.”
Emerging Markets
Emerging-market stock funds lost $1.87 billion in the week ended June 24, the first week of net outflows since early March, on concern that a rebound in exports will be delayed, EPFR Global said.
Furukawa Electric, which makes wires and cables, jumped 6 percent to 439 yen, while Hitachi Cable Ltd. climbed 7.5 percent to 314 yen. Morgan Stanley increased a 12-month price estimate on Furukawa Electric shares to 560 yen from 410 yen. Hitachi Cable had its target price more than doubled to 290 yen.
China Cosco, the world’s largest operator of dry bulk ships, climbed 6.9 percent to HK$9.76. Chairman Wei Jiafu said yesterday “the BDI will have a V-shape rebound after its dive,” referring to the Baltic Dry Index, a measure of shipping rates. The gauge has fallen 9.1 percent in the last five days.
To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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