By Masaki Kondo
Oct. 20 (Bloomberg) -- Asian stocks rose, driving the MSCI Asia Pacific Index to a 13-month high, after Australia’s central bank signaled more interest-rate increases as economic growth accelerates and Apple Inc. reported better-than-estimated profit.
Challenger Financial Services Group Ltd. climbed 6.3 percent in Sydney as assets under management jumped on improving investor confidence. Industrial & Commercial Bank of China Ltd. rose 2.4 percent in Hong Kong after holders of about $3.1 billion of the lender’s stock said they had no plans to sell their shares. Foxconn International Holdings Ltd., the No. 1 contract maker of mobile-phones globally, surged 6.3 percent after Apple’s quarterly profit surged 47 percent.
“The global economy is continuing to recover,” said Masaru Hamasaki, a strategist at Tokyo-based Toyota Asset Management Co., which oversees about $14 billion. “Demand is improving, especially in high-tech industries, and we can expect a series of better-than-expected results from companies.”
The MSCI Asia Pacific Index added 0.9 percent to 121.47 as of 5:59 p.m. Tokyo time, the highest level since Sept. 1, 2008. The gauge has surged 72 percent from a five-year low on March 9 amid signs the global economy is rebounding from the worst slowdown since World War II.
Japan’s Nikkei 225 Stock Average added 1 percent. Komatsu Ltd., the world’s No. 2 maker of construction machinery, added 1.4 percent as the Nikkei newspaper said the company will report a quarterly profit. Australia’s S&P/ASX 200 Index rose 1.1 percent as Rio Tinto Group jumped 3.3 percent on higher metal prices. China’s Shanghai Composite Index gained 1.5 percent.
Disrupted Production
South Korea’s Kospi Index added 0.6 percent, with LG Display Co. gaining 3.3 percent after a production disruption at a Corning Inc. liquid-crystal display factory in Taiwan raised speculation panel prices will rise.
Futures on the Standard & Poor’s 500 Index were little changed. The gauge rose 0.9 percent yesterday to the highest in more than a year. Caterpillar Inc., Komatsu’s largest rival, surged 6 percent after RBC Capital Markets recommended the stock.
The dollar traded near a 14-month low against the euro amid rising demand for higher-yielding assets. The dollar was at $1.4957 per euro, little changed from $1.4965 in New York yesterday after earlier declining to $1.4994, the weakest since August 2008.
Australia’s dollar rose to the highest since August 2008 after central bank policy makers said in minutes of their Oct. 6 meeting that a “very expansionary setting of policy was no longer necessary, and possibly imprudent.” They raised the benchmark interest rate by a quarter percentage point at that meeting and signaled another increase as soon as next month.
ICBC Shareholders
Challenger Financial Services Group climbed 6.3 percent to A$3.90, the third-biggest increase on the S&P/ASX 200 Index today. Sales of annuities and related products more than doubled in the third quarter, and assets under administration and advice rose 50 percent, the company said.
In Hong Kong, Industrial & Commercial Bank, the world’s biggest lender, gained 2.4 percent to HK$6.34. Allianz SE and American Express Co. said they had no immediate plans to sell their stakes past a lockup on the holdings that expires today.
Allianz has 3.22 billion Hong Kong-traded ICBC shares, worth HK$19.9 billion ($2.57 billion), while American Express owns 638 million shares with a value of HK$3.95 billion.
Technology companies accounted for 10 percent of the MSCI Asia Pacific Index’s advance. After the close of U.S. trading, Apple reported a 47 percent surge in fourth-quarter net income on demand for iPhones, iPods and Macintosh computers. Texas Instruments Inc., the second-biggest U.S. chipmaker, forecast fourth-quarter profit and sales that beat analysts’ estimates.
Apple shares surged 6.6 percent in after-hours trading, while Texas gained 2.8 percent.
Beating Forecasts
Foxconn surged 6.3 percent to HK$7.06. In Japan, Murata Manufacturing Co., which makes capacitors used in mobile-phone handsets, jumped 1.8 percent to 4,480 yen and Foster Electric Co., which makes headphones, advanced 4.4 percent to 2,360 yen.
“We’re likely to see companies beat forecasts as they report in coming weeks,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo, which oversees the equivalent of $4 billion. “The question remains though whether they will lift full-year projections.”
Komatsu, which trades at 52.3 times estimated earnings this year, advanced 1.4 percent to 1,822 yen, while rival Hitachi Construction Machinery Co. gained 2 percent to 2,270 yen.
Komatsu likely had an operating profit of 10 billion yen ($111 million) in the three months through September, compared with 8.2 billion yen in the previous quarter, the Nikkei newspaper reported.
Rising Valuations
The MSCI Asia Pacific Index has rallied 36 percent this year, set for its biggest annual increase since 2003, amid better-than-estimated earnings and economic reports. Shares in the gauge are priced at an average 23.4 times estimated earnings, higher than 18.1 times for the S&P 500 in the U.S. and 16 times for Europe’s Dow Jones Stoxx 600 Index.
Rio Tinto, the world’s No. 3 mining company, rose 3.3 percent to A$66.80, while market leader BHP Billiton Ltd. gained 2.1 percent to A$39.91 in Sydney. Mitsubishi Corp., a Japanese trading company that gets 39 percent of its sales from commodities, advanced 2.8 percent to 2,040 yen.
Crude oil rose 1.4 percent to $79.61 a barrel in New York yesterday, the highest level since Oct. 13, 2008. The London Metals Index, a measure of six metals including copper and zinc, jumped 3.2 percent yesterday to the highest close since Aug. 13.
LG Display, the world’s second-largest maker of liquid- crystal displays, jumped 3.3 percent to 32,900 won. Asahi Glass Co. added 1.9 percent to 809 yen in Tokyo.
New York-based Corning, the biggest LCD maker globally, said yesterday its manufacturing facility in Taiwan experienced power disruption over the weekend, which is expected to have a material impact on glass volume in the fourth quarter.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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