By Masaki Kondo and Shani Raja
July 23 (Bloomberg) -- Asian stocks rose for an eighth day, led by automakers and technology companies, as a weaker yen boosted the prospects for Japanese export earnings and U.S. housing prices unexpectedly gained.
Japan’s Funai Electric Co., which gets 71 percent of its revenue in North America, climbed 3.9 percent. Bank of East Asia Ltd. rose 3.3 percent in Hong Kong as JPMorgan Chase & Co. said an offer of compensation from the city’s banks for notes linked to failed Lehman Brothers Holdings Inc. removed a drag on shares. Sun Hung Kai Properties Ltd. rallied 4 percent on a newspaper report that the company had rented most of the shops at a Singapore mall.
The MSCI Asia Pacific Index added 0.4 percent to 107.12 as of 8:04 p.m. in Tokyo, with five stocks advancing for every three that declined. The gauge has gained 9.2 percent in the past eight days, the longest winning streak since January.
“The sentiment is one of cautious optimism,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State, which holds about $110 billion. “The economy and markets are not likely to continue to recover in a straight line. There are going to be ebbs and flows.”
Hong Kong’s Hang Seng Index climbed 3 percent, led by financial shares. China’s Shanghai Composite Index gained 1 percent, while South Korea’s Kospi Index added 0.2 percent.
Japan’s Nikkei 225 Stock Average rose 0.7 percent, extending its advance to a seventh day, as the yen weakened against the dollar, raised earnings outlooks for car and electronics makers. Disco Corp., which makes precision machinery, jumped 5 percent after reporting a surge in sales.
U.S. Housing
Australia’s S&P/ASX 200 Index dipped 0.1 percent. National Australia Bank Ltd., the nation’s top lender by assets, slumped 5.2 percent after pricing a share sale at a discount. Woolworths Ltd., the country’s biggest retailer, sank 3.7 percent as rising valuations pushed a brokerage to cut its rating.
Futures on the U.S. Standard & Poor’s 500 Index gained 0.2 percent. The gauge was little changed yesterday.
Average U.S. home prices rose 0.9 percent in May from April, the Federal Housing Finance Agency said yesterday. Prices were estimated to drop 0.2 percent, according to an economist survey.
Funai climbed 3.9 percent to 4,010 yen in Osaka trading. James Hardie Industries NV, the biggest seller of home siding in the U.S., rose 1.5 percent to A$4.82 in Sydney.
Toyota Motor Corp., which gets more than a half its profit from North America, rose 1.7 percent to 3,660 yen in Tokyo. Sony Corp., maker of the PlayStation 3 game machine, added 1.5 percent to 2,330 yen. The yen depreciated to as much as 94.38 from 93.58 at the 9 a.m. opening of Tokyo stock trading.
Light Trading
“Housing is no longer the drag on the market that kept pulling everything down,” said Mitsushige Akino, who oversees the equivalent of $522 million at Ichiyoshi Investment Management Co. in Tokyo. “Volumes remain light though, so shares are likely to remain range-bound until we can get some new sense of direction.”
Shares traded today on the Tokyo Stock Exchange’s first section were 3 percent below the three-month average, according to data compiled by Bloomberg. Trading volumes of stocks on Hong Kong’s Hang Seng Index were 12 percent below average.
The MSCI Asia Pacific Index’s eight-day rally has come amid better-than-expected earnings from U.S. companies including Apple Inc. and International Business Machines Corp. Shares in the gauge are valued at 24 times estimated net income, near the highest in almost four months.
“The market has really run ahead of itself in the last week or so,” Arjuna Mahendran, Singapore-based chief investment strategist for Asia at HSBC Private Bank, which oversees $494 billion in assets, said on Bloomberg Television. “We have reasonable optimism that the spate of above-expectation earnings that have been coming out will continue.”
Economic Recovery
The International Monetary Fund saw signs of stabilization in the global economy, Deputy Managing Director Takatoshi Kato said last month in a speech made public today. Japan’s Finance Ministry said today the nation’s exports decreased in June at the slowest pace of decline since December.
Disco rallied 5 percent to 4,390 yen. First-quarter revenue jumped 42 percent from the previous three months as demand recovered, the company said yesterday in a preliminary report.
In Hong Kong, Bank of East Asia gained 3.3 percent to HK$25.10. HSBC Holdings Plc, the biggest bank in Hong Kong by branches, added 2.7 percent HK$72.10. BOC Hong Kong (Holdings) Ltd. advanced 2.5 percent to HK$15.54.
Hong Kong banks offered to pay at least 60 cents on the dollar to investors in notes linked to Lehman. The repurchase of the notes “should remove a major overhang” for the sector, JPMorgan analysts wrote in a note to clients today.
Share Sales
Sun Hung Kai Properties, Hong Kong’s biggest developer, jumped 4 percent to HK$111.10. The company expects annual rental income of HK$815 million ($105 million) from its newly opened ION Orchard mall in Singapore, the Standard said.
National Australia Bank slumped 5.2 percent to A$22.35. The bank said it will sell shares at A$21.50 ($18) each, a discount of 8.8 percent from the previous closing price. Rival Suncorp- Metway Ltd. lost 1.7 percent to A$6.78 and Bank of Queensland Ltd. slid 2.7 percent to A$10.22.
Chunghwa Picture Tubes Co., Taiwan’s No. 3 maker of liquid- crystal displays, lost 3.4 percent to NT$4.83. The company is selling as many as 100 million new global depositary receipts at a discount of up to 20 percent, a document from the sale arrangers showed.
Woolworths slumped 3.7 percent to A$26.55. Royal Bank of Scotland Group Plc slashed the rating on the stock to “hold” from “buy,” citing valuations.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
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