By Jonathan Burgos and Yoshiaki Nohara - Dec 21, 2011 6:04 PM GMT+0700
Asian stocks (MXAP) rose for a second day, with a benchmark index set for the biggest gain in almost three weeks, as China pledged support for exporters and small businesses and after improved U.S. and German economic data.
Honda Motor Co. (7267), the Japanese carmaker that gets about 44 percent of its sales from North America, advanced 2.4 percent in Tokyo on speculation shipments will rise amid signs the U.S. economy is improving. Onesteel Ltd., the second-worst performer in the MSCI Asia Pacific Index this year, jumped 7.1 percent after Goldman Sachs Group Inc. named it among top Australian stock picks for next year. Mining and energy stocks gained as oil and copper prices climbed.
“The U.S. is showing it’s fairly robust in terms of not being dragged down to the extent of European economies,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The question is, given we are coming into a holiday period, how sustainable those gains are going to be over the next week or so.”
The MSCI Asia Pacific Index advanced 2.2 percent to 113.38 as of 8:02 p.m. in Tokyo, with almost nine shares rising for each that fell. The gauge dropped to a three-week low on Dec. 19 after North Korean leader Kim Jong Il died and Fitch Ratings said it may cut the credit ratings of European nations.
Trading volumes were below the 30-day average for all major markets in the region except India, according to data compiled by Bloomberg.
Japan’s Nikkei 225 Stock Average (NKY) increased 1.5 percent, while South Korea’s Kospi Index jumped 3.1 percent. Australia’s S&P/ASX 200 rose 2.1 percent. Hong Kong’s Hang Seng Index gained 1.9 percent.
U.S. Rebound
The Hang Seng China Enterprises Index added 2.2 percent after Premier Wen Jiabao pledged to provide capital support for small and medium-sized companies affected by the nation’s slowing economic growth. The Shanghai Composite Index slipped 1.1 percent, erasing gains of as much as 1 percent.
Futures on the Standard & Poor’s 500 Index (SPX) rose 0.4 percent today. The index advanced 3 percent in New York yesterday after housing starts in November rose to the most since April 2010 and payrolls increased in 29 states.
Shares of Asian exporters advanced. Honda gained 2.4 percent to 2,325 yen. Samsung Electronics Co., South Korea’s biggest exporter of devices such as mobile phones and semiconductors, climbed 4.5 percent to 1.057 million won in Seoul. James Hardie Industries SE (JHX), a maker of building materials that counts the U.S. as its biggest market, added 1.8 percent to A$6.66.
Shipping Alliance
Stocks also gained as concern about Europe’s debt crisis eased after Spain sold 5.64 billion euros ($7.38 billion) of bills, more than the maximum target, and German business confidence unexpectedly grew.
Shipping stocks advanced on speculation a new alliance formed by Mitsui O.S.K. (9104) Lines Ltd., Hyundai Merchant Marine Co., Neptune Orient Lines Ltd. and three other lines on the Asia- Europe trade route will help stem a decline in rates.
Mitsui O.S.K., Japan’s second-biggest freight carrier by sales, increased 1.8 percent to 288 yen in Tokyo. Hyundai Merchant Marine, South Korea’s No. 2, jumped 4.5 percent to 25,400 won in Seoul. Neptune Orient Lines Ltd, Southeast Asia’s largest container carrier, gained 3.6 percent to S$1.15.
Worst Performers
The MSCI Asia Pacific Index slumped 19 percent this year year through yesterday. Utilities were the worst performing industry in the gauge as Japan’s nuclear-power producers tumbled after the worst nuclear accident in 25 years engulfed Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. Tepco, as the utility is known, is the worst performer on the gauge, followed by OneSteel (OST), Australia’s second-biggest producer of the metal.
OneSteel, which tumbled 75 percent this year through yesterday, increased 7.1 percent to 68 Australian cents. Goldman Sachs recommended investors “buy” the stock, saying the company may benefit from a potential loosening of monetary policy in China.
The Asia-Pacific index’s drop this year compared with a 1.3 percent decline by the S&P 500 and a 14 percent slide by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.4 times estimated earnings on average, compared with 12.6 times for the S&P 500 and 10.4 times for the Stoxx 600.
Commodity Stocks
Raw-material producers and energy companies advanced today after commodity prices rallied on the improving outlook for the U.S. and Europe and after Wen’s pledge of support for Chinese producers. China is the world’s biggest consumer of copper.
BHP Billiton Ltd. (BHP), which counts China’s as its No. 1 market, climbed 3 percent to A$35.13. Jiangxi Copper Co., China’s biggest producer of the metal, rose 1.9 percent to HK$16.84 in Hong Kong.
Among stocks that dropped, Tepco sank 9.8 percent to 211 yen in Tokyo. The utility may be effectively nationalized, the Yomiuri newspaper reported, citing an unidentified person familiar with the plan. The company denied the report.
To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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