By Yoshiaki Nohara and Norie Kuboyama - Dec 30, 2011 1:20 PM GMT+0700
Dec. 29 (Bloomberg) -- Jeff Papp, an analyst at Oberweis Asset Management Inc., talks about the outlook for China's economy and stock markets in 2012, and his investment strategy. He speaks with Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)
Asian stocks (MXAP) edged higher on the last trading day of 2011, with the region’s benchmark index set for its first yearly drop since 2008, as rising U.S. home sales signaled the world’s largest economy is weathering Europe’s debt crisis.
Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, gained 2 percent. Techtronic Industries Company Ltd., a maker of industrial products that gets about 73 percent of its revenue in North America, added 1.3 percent in Hong Kong. Cnooc Ltd. (883), China’s largest offshore energy explorer, rose 0.7 percent after oil prices gained. Power Finance Corp. gained 5.5 percent after saying it plans to sell bonds next week.
The MSCI Asia Pacific Index (MXAP) added 0.4 percent to 113.26 as of 3:12 p.m. in Tokyo, with all 10 of its industry groups advancing. The measure has lost 0.3 percent this month and is set for an 18 percent drop this year. For the week, the gauge is down 0.4 percent.
“Investors increasingly feel the U.S. economy is firmer than they had expected,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “The economic data is looking good and that will boost stock markets, especially when concern about Europe’s debt issues aren’t in the forefront.”
The Asia Pacific gauge has lost about $1.78 trillion this year amid concern Europe’s three-year debt crisis will drag the global economy into recession. Stocks on Asia’s benchmark are valued at 12.6 times estimated earnings on average, compared with 12.6 times for Standard & Poor’s 500 Index (SPXL1) and 10.5 times for the Stoxx Europe 600 Index.
Fukushima Dai-Ichi
Utilities have fallen 26 percent this year, dropping the most among the 10 industry groups on the Asian gauge. Japanese power producers tumbled amid a nuclear crisis at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. The utility has lost 91 percent this year, the biggest drop on the MSCI All Country World Index (MXWD).
Japan’s Nikkei 225 Stock Average (NKY) gained 0.7 percent today. Trading volume was 53 percent below the 100-day average ahead of a four-day weekend. Hong Kong’s Hang Seng Index rose 0.3 percent. Australia’s S&P/ASX 200 lost 0.4 percent. South Korea’s market was closed today for a holiday.
Futures on the S&P 500 Index slid 0.2 percent. The gauge advanced 1.1 percent yesterday in New York after a report showed a jump in pending sales of existing homes that exceeded economist estimates by almost five times.
Sony, James Hardie
Exporters to the U.S rose. Sony added 2 percent to 1,382 yen in Tokyo, while Techtronic Industries rose 1.3 percent to HK$8.02.
Gains in stocks were limited after Italy yesterday fell short of its target in a debt auction. Prime Minister Mario Monti said his government won’t “rule out” more aggressive efforts to reduce debt.
“Markets will continue to be unstable for the first quarter of next year,” said Masaru Hamasaki, Tokyo-based chief strategist at Toyota Asset Management Co., which oversees the equivalent of $24 billion. “European nations will need to unite as they debate how to rehabilitate the region’s finances. The leadership will be tested.”
Cnooc rose 0.7 percent to HK$13.68. West Texas Intermediate crude for February delivery gained as much as 0.5 percent to $100.16 a barrel on the New York Mercantile Exchange.
Power Finance (POWF) rose the most on the Asia Pacific index after R. Nagarajan, executive director for finance said the company plans to sell at least 1.5 billion rupees ($28 million) of bonds next week. The stock gained 5.5 percent to 139.3 rupees.
Among other stocks that advanced, Japanese engineering company Chiyoda Corp. (6366) gained 2.1 percent to 783 yen. The Nikkei newspaper reported the company will likely beat its forecast for operating profit by up to 3 billion yen ($39 million) in the year ending March due to lower-than-expected costs on a liquefied natural gas project in Qatar.
To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
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