Most Asian Stocks Rise, Led by Automakers on U.S. Retail Sales

By Masaki Kondo

Jan. 8 (Bloomberg) -- Most Asian stocks rose as gains among automakers on higher U.S. retail sales overshadowed declines by mining companies on lower commodities prices.

Honda Motor Co., which got 44 percent of its sales in North America in the six months to September, added 2.8 percent, and bigger rival Toyota Motor Corp. jumped 3.1 percent in Tokyo as U.S. retailers’ December sales beat estimates. Zijin Mining Group Co. and Korea Zinc Co. lost at least 1.9 percent, pacing declines among material producers on lower metal prices.

The MSCI Asia Pacific Index added 0.3 percent to 123.73 as of 2:52 p.m. Tokyo time after falling 0.2 percent earlier. Five stocks advanced for every four that declined. The gauge added 2.7 percent this week, the most since the period ended Dec. 4, as economic figures bolstered optimism growth around the region is accelerating.

“Company earnings will significantly improve this year with the global economy picking up and cost reductions starting to take effect,” said Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd., which holds about $54 billion.

Japan’s Nikkei 225 Stock Average rose 0.8 percent. Aeon Co., the country’s largest supermarket operator, soared 7.4 percent after its nine-month loss narrowed from a year earlier, prompting JPMorgan Chase & Co. to raise its recommendation.

The Shanghai Composite Index fell 1.3 percent amid concern the government will tighten monetary policy to combat inflation and curb asset price speculation. PetroChina Co. fell 2 percent after an explosion at one of its plants and after oil prices fell.

U.S. Retail Sales

The Hang Seng Index lost 0.2 percent in Hong Kong, where Hutchison Telecommunications International Ltd. rallied 28 percent as its parent company offered to buy out the unit.

Taiwan’s Taiex Index gained 0.5 percent as the government reported a surge in exports. The S&P/ASX 200 Index rose 0.2 percent in Sydney even after a report showed Australia’s building industry shrank in December for a second month.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The gauge added 0.4 percent yesterday as retailers’ sales gained more than analysts estimated, indicating higher holiday spending than some trade groups anticipated. December comparable-store sales climbed 3 percent, the biggest gain since April 2008, Retail Metrics Inc. said yesterday.

In Tokyo, Honda, Japan’s No. 2 carmaker, rose 2.8 percent to 3,175 yen, while Toyota climbed 3.1 percent to 3,970 yen on speculation the weaker yen will boost the value of overseas sales. The two companies were the biggest contributors to the MSCI Asia Pacific Index’s advance.

‘Sense Of Relief’

The yen depreciated to 93.77 today against the dollar, the weakest level since Aug. 28. Naoto Kan, who replaced Hirohisa Fujii as Japan’s finance minister, said in his inaugural press conference yesterday that he would like the currency to weaken “a bit more.”

“The yen was already falling, so it’s reactive to anything that triggers a further weakening,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $92.3 billion. “Positive U.S. retail sales gave a sense of relief on the U.S. economy and markets.”

The MSCI Asia Pacific Index increased 34 percent last year, outpacing gains of 23 percent by the S&P 500 and 28 percent for Europe’s Dow Jones Stoxx 600 Index amid bets Asian growth will outstrip the rest of the world. Stocks in the MSCI gauge trade at an average of 20 times estimated earnings, compared with 15 times for the S&P 500 and 13 for the Stoxx.

Commodities Decline

Taiwan’s exports climbed 46.9 percent in December from a year earlier, the fastest pace since February 1995, the Ministry of Finance said yesterday, as the global recovery fueled demand for computers, mobile phones and television screens.

Material producers and energy companies were the biggest drag on the MSCI Asia Pacific Index as gold futures in New York sank 0.9 percent in after-hours trading, while copper dropped 0.5 percent. The London Metal Exchange, a measure of six metals including copper, lost 2.4 percent yesterday.

Zijin, China’s largest gold producer, lost 3.1 percent to HK$7.85 in Hong Kong. Korea Zinc, the world’s second-biggest zinc refiner, slid 1.9 percent to 207,000 won.

Santos Ltd., Australia’s No. 3 oil and gas producer, fell 1 percent to A$14.29. Oil futures in New York dropped 0.5 today, extending yesterday’s 0.6 percent decline.

The Shanghai Composite Index was set for its first weekly decline in three amid concerns growth will slow. The country’s central bank yesterday sold three-month bills at a higher interest rate for the first time in 19 weeks after saying its focus for 2010 is controlling the record expansion in lending and curbing price increases.

‘Matter Of Time’

“It’s just a matter of time before the central bank raises interest rates or reserve ratios,” said Wang Zheng, a fund manager at Jingxi Investment Management Co. “The market is now pricing in the negative factor and it’ll be a hard year to seek good returns from equities.”

SAIC Motor Corp., China’s largest carmaker, slumped 8 percent to 22.19 yuan. Jiangxi Copper Co., the nation’s top producer of the metal, retreated 4.3 percent to 39.52 yuan.

PetroChina slid 2 percent to 13.34 yuan in Shanghai. Five people are missing after an explosion and fires at a petrochemical plant at Lanzhou in northwestern China, China National Petroleum Corp., PetroChina’s parent, said today.

Hutchison Telecommunications surged 28 percent to HK$2.12 in Hong Kong. Parent Hutchison Whampoa Ltd. agreed to buy the 40 percent it doesn’t own of the subsidiary for HK$2.20 a share.

Aeon surged 7.4 percent to 855 yen, the steepest gain since June 12. The company’s net loss narrowed 66 percent in the nine months ended Nov. 30 from a year earlier, Aeon said yesterday. JPMorgan lifted its rating on the stock to “neutral” from “underweight.”

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.