By Jonathan Burgos - Nov 11, 2011 3:37 PM GMT+0700
Asian stocks rose, rebounding from the biggest decline in seven weeks yesterday, as U.S. jobless claims fell and the selection of a new Greek premier tempered concern Europe’s debt crisis won’t be contained.
Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, climbed 2.4 percent. China Petroleum & Chemical Corp. (600028), Asia’s biggest refiner, rose 3.1 percent in Hong Kong after its parent agreed to buy a 30 percent stake in Galp Energia SGPS SA’s Brazil unit. Genting Singapore Plc (GENS) slumped 5.9 percent after Citigroup Inc. lowered its rating to “sell” as the casino-resort operator posted sales and profit that missed analysts’ estimates.
“The U.S. is doing alright,” said Andrew Pease, Sydney- based senior investment strategist for the Asia-Pacific region at Russell Investment Group. “So far the contagion from Europe to the U.S. that everyone has been worried about seems to be fairly limited. That’s a good sign. But Europe is going to get worse before it gets better.”
The MSCI Asia Pacific Index gained 0.8 percent to 116.89, as of 5:26 p.m. in Tokyo, with about five shares rising for every four that fell. The measure fell 3.3 percent yesterday, the most since Sept. 22, after reports showed Japan’s machinery orders dropped and China’s export growth slowed, and signs emerged that Europe’s debt crisis has infected Italy.
Nikkei, Kospi
Australia’s S&P/ASX 200 rose 1.2 percent and South Korea’s Kospi Index jumped 2.8 percent. Hong Kong’s Hang Seng Index advanced 0.9 percent, while China’s Shanghai Composite Index gained 0.1 percent. Japan’s Nikkei 225 (NKY) Stock Average added 0.2 percent, erasing losses of as much as 0.2 percent.
Futures on the Standard & Poor’s 500 Index gained 0.6 percent today, erasing losses of as much as 0.3 percent. In New York, the index rose 0.9 percent yesterday after a report showed that the number of Americans filing applications for unemployment benefits fell to the lowest level in seven months and as Greece named Lucas Papademos, the former vice president of the European Central Bank, to lead a unity government.
Exporters advanced. Sony, the maker of PlayStation game consoles and Bravia televisions, climbed 2.4 percent to 1,354 yen in Tokyo. Canon Inc. (7751), the world’s biggest camera maker, gained 2.1 percent to 3,435 yen. LG Electronics Inc. (066570), Asia’s second-largest maker of mobile phones by sales, jumped 6.4 percent to 64,600 won in Seoul.
‘On a Knife Edge’
The MSCI Asia Pacific Index is poised to decline for a second week as Europe’s sovereign-debt crisis stirred political turmoil across the region, with Italian Prime Minister Silvio Berlusconi and Greek Prime Minister George Papandreou both offering to step down.
“These markets are balanced on a knife edge,” Simon Flood, chief investment officer at Lion Global Investors Ltd., told Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” The firm oversees about $22 billion. “Until we get some clarity and some political leadership both in Europe and the U.S., the markets are going to continue to be volatile.”
Sinopec, as the Chinese oil refiner is known, gained 3.1 percent to HK$8.28 after parent China Petrochemical Corp. agreed to pay $3.54 billion for a 30 percent stake in Galp Energia’s Brazilian unit, giving it access to the biggest oil discovery in the western hemisphere since 1976.
Earnings Slump
“Sinopec Group has been looking at upstream assets globally and will continue to invest billions and billions in overseas acquisitions,” said Gordon Kwan, Mirae Asset Securities Ltd.’s head of regional energy research in Hong Kong. “Ultimately, the parent will inject those assets into the listed company when those assets become profitable.”
Esprit Holdings Ltd. (330), the Hong Kong-based clothier that gets most of its sales from Europe, jumped 4.7 percent to HK$9.95 after Chief Executive Officer Ronald Van Der Vis bought 300,000 shares of Esprit at an average price of HK$10.632 on Nov. 7. The stock tumbled 74 percent this year through yesterday as earnings slumped.
The MSCI Asia Pacific Index declined 16 percent this year through yesterday, compared with a 1.4 percent drop by the S&P 500 and a 15 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark were valued at 12.6 times estimated earnings on average, compared with 12.5 times for the S&P 500 and 10.2 times for the Stoxx 600.
Of the 538 companies on the Asian gauge that reported earnings since Oct. 11, 247 missed analysts’ estimates, while 186 exceeded expectations, according to data compiled by Bloomberg News.
Casino Operators
Genting Singapore sank 5.9 percent to S$1.585, poised for its biggest decline since Aug. 19, after the casino posted sales and profits that missed estimates. Citigroup lowered its rating on the stock to “sell” from “buy,” citing rising bad debt provisions.
Macau casino operators also declined on concern gambling spending in Asia may be slowing. Galaxy Entertainment Group Ltd. (27), the gaming company founded by billionaire Lui Che-Woo, slumped 6.9 percent to HK$14.40. Wynn Macau Ltd. declined 5.6 percent to HK$20.25. Sands China Ltd. (1928), Asia’s biggest gambling company by revenue, fell 4.5 percent to HK$22.10.
Olympus Corp. (7733), the maker of optical equipment that admitted this week it paid inflated fees to hide losses from acquisitions, decreased 5 percent to 460 yen after Japan’s Financial Services Agency said it will team up with the Tokyo Stock Exchange to investigate the cover-up amid investor concerns over governance in the world’s third-largest stock market.
-- Editors: John McCluskey, Jason Clenfield.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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