By Shani Raja and Saeromi Shin
Feb. 9 (Bloomberg) -- Asian stocks rose for the first time in four days as speculation European officials will help Greece tackle its budget deficit prompted investors to take on more risk through technology and energy shares. Drugmakers declined.
AU Optronics Corp. and Quanta Computer Inc. gained more than 3 percent in Taipei after boosting sales last month. Cnooc Ltd., China’s biggest offshore oil explorer, rose 3.2 percent as a partner made a discovery in the South China Sea. Sumitomo Mitsui Financial Group Inc. increased 2.1 percent in Tokyo after profit beat analyst estimates. Japan’s Takeda Pharmaceutical Co. and Manila Electric Co. slumped at least 2.6 percent, leading declines among so-called defensive shares.
The MSCI Asia Pacific Index added 0.3 percent to 114.49 as of 7:12 p.m. in Tokyo, with five stocks rising for every four that fell. The measure lost 3.7 percent in the past three days. The gauge has fallen 9.7 percent from a 17-month high on Jan. 15 on speculation central banks will tighten monetary policy, and that Greece, Spain and Portugal will struggle to curb deficits.
“Some confidence is building up that Greece would avert the worst-case scenario,” said Chu Moon Sung, a fund manager at Shinhan BNP Paribas Asset Management Co. in Seoul, which manages the equivalent to $26 billion in assets. “Investors seem to be looking for stocks that turned cheaper after they panicked on the Greece issue.”
Taiwan’s Taiex Index climbed 2 percent, the most in the region. Hong Kong’s Hang Seng Index gained 1.2 percent and China’s Shanghai Composite Index added 0.5 percent. Japan’s Nikkei 225 Stock Average lost 0.2 percent, while Australia’s S&P/ASX 200 Index declined 0.4 percent.
Disappointing Forecast
China Zhongwang Holdings Ltd., a Liaoning-based aluminum producer, plunged 27 percent in Hong Kong as it resumed trading, after denying newspaper reports challenging the accuracy of its accounts. Macquarie Group Ltd., Australia’s largest investment bank, slipped 6.1 percent after the company’s profit forecast disappointed some investors.
Futures on the U.S. Standard & Poor’s 500 Index rose 0.8 percent. Europe concerns dragged the gauge down by 0.9 percent yesterday. Credit-default swaps, or the cost of insuring against losses on sovereign debt, on Spain and Portugal jumped to a record, according to CMA DataVision. Those for Greece also hovered near an all-time high.
“Markets are climbing the wall of worry and are yet to be fully convinced that a workable solution is in the offing regarding highly indebted European countries such as Greece and Spain,” said Tim Schroeders, who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne.
Budget Deficit
European Central Bank President Jean-Claude Trichet leaves a central bankers’ meeting in Sydney today to attend a gathering of European Union leaders. His departure, a day earlier than planned, sparked speculation policy makers will help Greece address its budget deficit, dragging the yen and dollar lower.
The MSCI Asia Pacific Index completed its third weekly decline last week as an unexpected increase in U.S. jobless claims losses and concerns over debt in Europe dented investor confidence. That cut the average price of stocks in the gauge to 18 times estimated earnings, the lowest level since February 2009, according to data compiled by Bloomberg.
AU Optronics, the world’s third-largest flat-panel maker, added 3.7 percent to NT$36.20 after the company said January sales jumped 175 percent from a year earlier. Quanta Computer, the world’s second-largest maker of laptops, advanced 3.3 percent to NT$63.20, after its January sales climbed 83 percent.
In Hong Kong, Cnooc climbed 3.5 percent to HK$11.80. The Liuhua 29-1 find by Husky Energy Inc. coincides with a push to develop oil and gas reserves off China’s coast while Cnooc seeks overseas resources to meet domestic demand.
Defensive Stocks
Utilities and drugmakers were the heaviest drags on the index today. The companies had been the best and second-best performing groups in the MSCI Asia Pacific Index from Jan. 15 to yesterday on expectations their earnings will be sheltered from any faltering in the pace of the global recovery.
Takeda Pharmaceutical fell 2.6 percent to 3,895 yen. Dainippon Sumitomo Pharma Co. lost 2.6 percent to 890 yen. Manila Electric slumped 3.7 percent to 157 pesos. Korea Gas Corp., the world’s biggest buyer of liquefied natural gas, retreated 1.7 percent to 51,400 won.
“Shares have been sold to the level where there is little room for further drop,” said Masanori Ikunaga, who helps manage the equivalent of $112 billion at Tokyo-based Sumitomo Mitsui Asset Management Co. “Investors are expecting the market will soon rebound and replaced defensive shares with stocks that are more sensitive to a move in the broader market.”
Sumitomo Mitsui, Japan’s second-largest bank by market value, gained 2.1 percent to 2,831 yen. The lender posted third- quarter profit that beat analysts’ estimates as losses on shareholdings and bad-loan charges declined.
Global Recession
Rinnai Corp., a Japanese maker of gas appliances, jumped 7.2 percent to 4,530 yen after raising its full-year profit forecast. Cochlear Ltd., maker of the world’s best-selling hearing implant, climbed 3.5 percent to A$63.55 after first-half profit rose 8 percent on new product sales.
The MSCI gauge rose 34 percent last year as growth in China helped the global economy emerge from the worst recession since World War II. The S&P 500 Index gained 23 percent in 2009, while Europe’s Dow Jones Stoxx 600 Index added 28 percent.
Among stocks that fell today, China Zhongwang plunged 27 percent to HK$5.87. The stock was suspended on Jan. 7. The company released a statement late yesterday restating that a review of Zhongwang’s accounts by Ernst & Young LLP found “no deficiencies” with accounts included in its May 8 initial public offering prospectus.
Verification Procedures
Zhongwang said that while its audit committee had approved its accounts, Ernst & Young said it found some “external limitations in its verification procedures which require certain information of independent third parties.” Macquarie slipped 6.1 percent to A$47.29. The company said net income in the six months to March 31 may climb 10 percent from the first half. That indicates second-half profit of A$526.9 million ($457 million), below the A$586 million average estimate of three analysts surveyed by Bloomberg.
Macquarie’s forecast is “slightly below the more bullish analysts,” said Angus Gluskie, who oversees $300 million at White Funds Management Pty in Sydney. “Some investors were looking for a greater upgrade, so on a short-term basis are happy to close out positions given the softness in the market.”
Westpac Banking Corp., Australia’s second-largest lender by market value, lost 1.6 percent to A$22.88 as the cost of protecting Australian government bonds from default jumped to almost a nine-month high today, according to Deutsche Bank AG.
Koito Industries Ltd., which makes seats for trains and airplanes, plunged 33 percent to 159 yen. The company will fix about 150,000 passenger seats in some 1,000 commercial airliners after saying that it falsified test results and made unauthorized design changes.
To contact the reporters for this story: Shani Raja in Sydney at sraja4@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net.
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