Asia Stocks, Won Gain on Greece Aid Outlook

By Bloomberg News - Nov 4, 2011 12:29 PM GMT+0700

Asia stocks and South Korea’s won gained for the first time in five days, while bond risk fell after Greece scrapped a referendum on a bailout plan, moving the nation closer to receiving aid. Australia’s dollar weakened after the central bank cut growth forecasts.

The MSCI Asia Pacific Index added 2.5 percent at 2:26 p.m. in Tokyo. Standard & Poor’s 500 futures lost 0.1 percent after a two-day gain in the U.S. stocks gauge. South Korea’s won jumped 1.7 percent, the euro traded at $1.3814 from $1.3823 yesterday, while the Aussie declined 0.3 percent. The cost of insuring Asian debt sank the most in more than a week. Copper increased a third day in London, while gold snapped a three-day advance.

Greek Prime Minister George Papandreou scrapped the referendum to avert a split in his party before a confidence vote today, after European leaders said the move may determine the nation’s membership in the currency union and will threaten aid payments. U.S. data today may show employment cooled last month, while the Reserve Bank of Australia said economic growth for the next two years will be slower than previously forecast.

“There’s less risk today because people are little less concerned that Greece will run on its own direction,” Michael Vogelzang, chief investment officer at Boston Advisors LLC, said in an interview with Bloomberg Television. “It sounds like there is some progress.”

About eight shares gained for every one that declined in the MSCI Asia Pacific Index, helping to trim the index’s weekly loss to 3.7 percent. The Nikkei 225 Stock Average climbed 1.5 percent in Japan, where financial markets were closed for a holiday yesterday. Australia’s S&P/ASX 200 Index rallied 2.6 percent and South Korea’s Kospi Index jumped 3 percent.

LG Display, Sinopec

LG Display Co. added 8.4 percent after Hyundai Securities Co. said the world’s second-largest liquid-crystal-display maker will “significantly” reduce its operating loss in the current quarter. China Petroleum & Chemical Corp. (386) rose 7.8 percent after the China Securities Journal reported the government, which controls fuel prices, may permit refiners to make “appropriate” price changes, citing an unidentified source.

Futures signal the S&P 500 may halt yesterday’s 1.9 percent advance. Payrolls climbed by 95,000 workers last month after a 103,000 increase in September, according to the median forecast of 65 economists surveyed by Bloomberg News before the data. Treasury 10-year notes headed for a weekly gain, with yields little changed at 2.07 percent.

The dollar pared its weekly gain against the euro to 2.4 percent and traded at 78.01 yen from 78.06 yesterday. The 17- nation euro slipped 0.1 percent to 107.76 yen. Greece’s largest opposition party rebuffed Papandreou’s overtures to form a national government, raising the prospect of elections.

Won, Ringgit

Group of 20 chiefs meeting in Cannes, France, yesterday urged a swift resolution of Europe’s two-year financial crisis for the sake of the global economy.

The won traded at 1,110.93 per dollar, gaining for the first time this week. Malaysia’s ringgit strengthened 0.4 percent to 3.1215 after an economic report showed exports grew 16.6 percent in September, beating the 12.1 percent median forecast in a Bloomberg News survey of economists. Taiwan’s dollar rose 0.7 percent to $30.005.

Funds focused on emerging-market bonds received $671 million of flows for the week ending Nov. 2, according to a report from Barclays Capital, citing data from EPFR Global. Those investing in developing-nation stocks took in $3.5 billion, the most since April, Citigroup Inc. said in a separate report.

Australia’s Growth

The Australian dollar traded at $1.0383 after the Reserve Bank forecast growth of 4 percent in the 12 months to June 30, 2012, down from its Aug. 5 estimate of 4.5 percent. Consumer prices will rise 2 percent over the period, from a previous prediction of 2.5 percent; underlying inflation is predicted at 2.5 percent from a previous 3 percent, the central bank said.

The Markit iTraxx Australia index slumped 20 basis points to 175 basis points, according to Australia & New Zealand Banking Group Ltd. The gauge is set for its biggest daily drop since it declined 31.5 basis points on May 10, 2010, according to data provider CMA.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 12 basis points to 188.5 basis points, BNP Paribas SA prices show, while the Markit iTraxx Japan index declined eight basis points to 171.5, Deutsche Securities Inc. prices show.

Gold for immediate delivery dropped for the first time in four days, losing as much as 0.4 percent to $1,757.10 an ounce. The metal has gained 24 percent this year on increased haven and central-bank demand. Three-month copper climbed 0.8 percent to $7,979.75 a metric ton in London. Oil was little changed at $94.04 a barrel in New York following a two-day gain.

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net