By Adam Haigh and Jonathan Burgos
Oct. 15 (Bloomberg) -- Asian stocks advanced for a third day after JPMorgan Chase & Co.’s earnings topped estimates and Posco raised its profit forecast. Treasuries and the dollar fell as investors sought higher-yielding assets.
Hana Financial Group Inc., South Korea’s No. 4 financial company, climbed 3.6 percent in Seoul on speculation it may cancel a share-sale plan. Posco, Asia’s third-largest steelmaker, gained 3.7 percent as its forecast signaled higher demand for the raw material. Elpida Memory Inc. rose 2.9 percent after posting its first operating profit in eight quarters. Inpex Corp., Japan’s largest energy explorer, gained 2.6 percent as crude-oil prices climbed.
“Investors are putting more money into equities in anticipation of further improvements in economic data and corporate earnings,” said Michiya Tomita, who helps manage $61 billion at Mitsubishi UFJ Asset Management Co. in Hong Kong.
The MSCI Asia Pacific Index added 0.6 percent to 120.75 as of 7:34 p.m. in Tokyo, the highest level since Sept. 8, 2008. The gauge has climbed 71 percent from a more than five-year low on March 9 amid increasing signs stimulus measures around the world are reviving the global economy.
Japan’s Nikkei 225 Stock Average gained 1.8 percent as Elpida climbed and Credit Suisse Group AG advised buying shares of Panasonic Corp., the world’s largest maker of plasma televisions. South Korea’s Kospi Index advanced 0.6 percent.
Australia’s S&P/ASX 200 Index increased 0.6 percent as the country’s central bank governor signaled a “gradual expansion” for the economy next year. Retailers David Jones Ltd. and JB Hi- Fi Ltd. climbed more than 2 percent.
Most markets in the region rose, apart from Thailand, India and Sri Lanka. The SET Index sank 5.9 percent in Bangkok on concern over the health of the country’s king.
JPMorgan Earnings
Futures on the Standard & Poor’s 500 Index were little changed. The gauge rose 1.8 percent yesterday, while the Dow Jones Industrial Average rose above 10,000 for the first time in a year, following JPMorgan’s earnings and a better-than- estimated retail sales report.
Speculation the global recovery is on track caused investors to pare holdings of the U.S. currency and Treasuries today. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, sank 0.4 percent to 75.288, the lowest since August 2008. The yield on the 10- year Treasury note rose five basis points to 3.46 percent, according to BGCantor Market Data.
Financial companies led yesterday’s rally in U.S. stocks. JPMorgan’s investment-banking revenue from fixed income jumped to a record $5 billion as Chief Executive Officer Jamie Dimon capitalized on his 2008 acquisition of Bear Stearns Cos.
Seven-Month Rally
Finance shares are the MSCI Asia Pacific Index’s best- performing group in the rally since March as concerns eased about the health of the industry. Bear Stearns and Lehman Brothers Holdings Inc. were among the biggest casualties of the credit crisis that has caused more than $1.6 trillion of losses at the world’s biggest financial companies.
Sumitomo Trust & Banking Co., Japan’s fifth-biggest bank, climbed 4.7 percent to 492 yen. Westpac Banking Corp., the No. 2 lender in Australia by assets, added 1.1 percent to A$27.10.
“The news out of the U.S., particularly companies such as JPMorgan, is boosting sentiment and banks are likely to be at the center of a move by investors back into the market,” said Kazuhiro Takahashi, a general manager at Daiwa Securities SMBC Co. in Tokyo.
Hana Financial climbed 3.6 percent to 37,350 won after the Korea Economic Daily reported the company put its plan to sell new shares in a rights offer on hold after a plunge in its stock price. The company may reconsider a rights offer after March, the Korean-language newspaper said today.
Steel Demand
In Seoul, Posco climbed 3.7 percent to 534,000 won after lifting its operating profit forecast for 2009 by 23 percent yesterday amid signs steel demand is recovering. The World Steel Association said on Oct 12. that the global market will rebound 9.2 percent next year.
Elpida, Japan’s biggest computer-memory chipmaker, rose 2.9 percent to 1,260 yen. Operating profit, or sales minus the cost of goods sold and administrative expenses, was 500 million yen ($5.6 million) in the three months to Sept. 30, the company said in a preliminary earnings statement today. Elpida reported a 24.5 billion yen loss a year earlier.
Signs of growth in Asia have helped the MSCI Asia Pacific Index has outpaced gains by the S&P 500 Index and Europe’s Dow Jones Stoxx 600 Index in the past seven months. Stocks in the Asian gauge are valued at 23 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx 600.
Interest-Rate Increases
Reserve Bank of Australia Governor Glenn Stevens said today the central bank can’t be too timid in raising its benchmark interest rate now that the threat of an economic crisis in the nation has passed.
Stevens became the first Group of 20 central banker to increase borrowing costs when he unexpectedly boosted the overnight cash rate target last week by a quarter percentage point from a half-century low.
David Jones, a department-store operator, gained 2.1 percent to A$5.84. JB Hi-Fi climbed 5.6 percent to A$20.50 as brokerages from Morgan Stanley to Deutsche Bank AG boosted their share-price targets.
Panasonic rose 3 percent to 1,267 yen as Credit Suisse raised its recommendation to “outperform” from “neutral,” citing the company’s low valuations and strong balance sheet.
Inpex gained 2.6 percent to 787,000 yen, while Woodside Petroleum Ltd., Australia’s second-largest oil producer, added 1.1 percent to A$53.20. Crude oil rose above $75 a barrel in New York for the first time in a year. The London Metals Index, a measure of six metals including copper and zinc, added 0.9 percent yesterday.
China, Thailand
In China, the Shanghai Composite Index rose 0.3 percent as government reports showed new lending expanded last month and home prices increased. Bank of Communications Ltd. added 1.4 percent to 8.87 yuan, while Industrial Bank Co. gained 1.4 percent to 37.56 yuan.
Thailand’s SET Index fell for a third day, while the baht slumped to a two-week low as King Bhumibol Adulyadej, who has reigned for more than six decades, remained in hospital for a 26th day. The monarch’s “general condition is good,” the royal household said.
Siam Commercial Bank Pcl, the nation’s No. 3 lender by assets, slumped 6 percent to 81.75 baht, while Siam Cement Pcl, the country’s biggest maker of the building material, lost 6.3 percent to 209 baht. Crown Property Bureau, the monarchy’s investment arm, controls both companies.
“If something happens to the king, then there will be a period of confusion in Thailand,” Jim Rogers, chairman of Rogers Holdings, said today in Seoul.
To contact the reporters for this story: Adam Haigh in Hong Kong at ahaigh1@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
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