Asian Stocks Gain on Gold, Alcoa Forecast; Honda Drops on Yen

By Shani Raja

Sept. 3 (Bloomberg) -- Most Asian stocks advanced as gold prices climbed and after Alcoa Inc. said Chinese demand for aluminum will increase this year. Japanese carmakers fell as U.S. employers cut more jobs than forecast.

Newcrest Mining Ltd., Australia’s largest gold miner, climbed 7.7 percent after the metal climbed the most in more than five months yesterday. Aluminum Corp. of China Ltd. gained 7.3 percent in Shanghai. Honda Motor Co., which gets 45 percent of its revenue in North America, dropped 2.4 percent in Tokyo.

Five stocks advanced for every four that declined on the MSCI Asia Pacific Index, which added 0.1 percent to 112.57 as of 3:29 p.m. in Tokyo. The gauge has climbed 60 percent from a five-year low on March 9 on speculation the global economy is recovering. The rally has lifted the average price of stocks on the index to 1.5 times book value, close to an 11-month high.

“The economic data has caught up to where the market was,” said Stephen Halmarick, Sydney-based head of investment- markets research at Colonial First State, which holds about $115 billion. “For the equity market to really move on again, you need the next stage to take place, which is a more sustained recovery and better profitability.”

China’s Shanghai Composite Index climbed 4.6 percent, and Hong Kong’s Hang Seng Index gained 1 percent. Taiwan’s Taiex index advanced 0.9 percent. Japan’s Nikkei 225 Stock Average fell 0.6 percent.

U.S. Payrolls

Dainippon Sumitomo Pharma Co. rose 1.2 percent in Tokyo amid plans to buy a U.S. drugmaker. Murchison Metals Ltd. climbed 8.4 percent in Sydney after the Australian iron-ore producer increased its estimate of the size and value of a key mine. Kawasaki Kisen Kaisha Ltd., Japan’s third-largest shipping line, fell 1.8 percent after Nomura Securities Co. downgraded the stock.

Futures on the Standard & Poor’s 500 Index added 0.3 percent. The gauge lost 0.3 percent yesterday as a survey by ADP Employer Services showed businesses reduced payrolls by 298,000 in August, while economists had forecast a drop of 250,000.

The Federal Reserve expressed “considerable uncertainty” about the strength of the economic recovery, minutes of its August meeting showed, while U.S. Treasury Secretary Timothy Geithner told reporters in Washington yesterday it was too soon to remove policies aimed at boosting growth.

A weaker dollar spurred demand for gold as an alternative investment, sending the precious metal’s futures up by 2.3 percent in New York. The gain was the biggest since March 19.

Newcrest climbed 7.7 percent to A$31.85, while Lihir Gold Ltd., Australia’s second-biggest gold-mining company, jumped 7.2 percent to A$2.98. Zijin Mining Group Co., China’s largest gold mine, surged 8.4 percent to HK$6.87 in Hong Kong.

Drilling Program

Aluminum Corp., known as Chalco, rose 7.3 percent to 13.19 yuan. Klaus Kleinfeld, chief executive officer of Alcoa, the largest U.S. aluminum producer, raised the company’s forecast for global aluminum consumption and said China’s demand for the lightweight metal will increase this year.

Alcoa expects China’s consumption of the material to rise 4 percent this year, compared with a previous prediction of zero growth, Kleinfeld said in an interview in New York.

Dainippon Sumitomo rose 1.2 percent to 1,025 yen. The drugmaker plans to buy Sepracor Inc. for $2.6 billion to expand in the U.S., the world’s biggest drug market. Murchison Metals climbed 8.4 percent to A$1.94 in Sydney after reporting that a drilling program revealed the Jack Hills project to be “of a significantly larger scale” than previously considered.

Yen Gains

Honda sank 2.4 percent to 2,840 yen as the stronger Japanese currency threatened the value of sales generated overseas. The yen appreciated to as much as 91.95 per dollar, a level not seen since July 13. Japan’s currency also gained to a seven-week high versus the euro.

Toyota Motor Corp., the world’s largest automaker, lost 1.8 percent to 3,850 yen. Pioneer Corp., which makes car-navigation and audio systems, slipped 5.9 percent to 273 yen.

“Investors are turning cautious as employment concerns have flared up again, while the stronger yen is going to be tough on the exporters,” said Mitsushige Akino, who oversees the equivalent of $637 million at Tokyo-based Ichiyoshi Investment Management Co. “It’s going to be very hard for stocks to start pushing to new highs.”

Since July 31, the MSCI Asia Pacific Index has traded within the 110 and 114 range, Bloomberg data show. The rally since March has boosted the average price of stocks in the gauge to 23 times estimated earnings, compared with 16.5 times for the S&P 500.

Stimulus Plans

The index has climbed 26 percent this year as government stimulus measures revive the global economy. Australia’s statistics bureau yesterday reported second-quarter gross domestic product growth that was faster than economists estimated, while reports today showed the nation’s services industry contracted at a slower pace last month.

Karoon Gas Australia Ltd. rallied as much as 7.1 percent before closing up 3 percent at A$10.41. The company and ConocoPhillips, its partner in an exploration program off Australia’s northwest coast, exercised an option to drill two additional wells under a contract with Sedco Forex International Inc., Karoon said in a statement late yesterday.

In Taipei, Yulon Nissan Motor Co., a joint venture between Japan’s Nissan Motor Co. and Yulon Motor Co., surged 6.9 percent to NT$79 after General Motors Co. raised its full-year China sales forecast. China Motor Corp., which builds Mercedes-Benz vans in China, advanced 6.9 percent to NT$20.15.

Sumitomo Light Metal Industries Ltd. slipped 3.1 percent to 94 yen in Tokyo after the aluminum maker reversed its full-year forecast to a net loss of 5.2 billion yen from 2.5 billion yen profit, citing a restructuring-related charge.

Kawasaki Kisen Kaisha fell 1.8 percent to 391 yen. Nomura cut its recommendation on the stock to “reduce” from “neutral” because of overcapacity among container lines.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.