Asian Stocks Snap Three-Day Losing Streak on Stronger U.S. Economic Data

By Jonathan Burgos and Yoshiaki Nohara - Dec 16, 2011 8:53 AM GMT+0700

Asian stocks rose, snapping three days of losses, after U.S. data on jobless claims and manufacturing beat estimates, easing concern Europe’s debt crisis will drag the global economy into a recession.

Samsung Electronics Co. (005930), South Korea’s biggest exporter of consumer electronics, increased 1.1 percent in Seoul. BHP Billiton Ltd., the world’s No. 1 mining company, climbed 0.5 percent as copper prices advanced. JB Hi-Fi Ltd. tumbled 15 percent after at least five analysts cut their recommendation as Australia’s second-largest electronics retailer predicted lower first-half earnings.

“The U.S. economy is ending the year in a bit better shape than people had anticipated, and that is good, but Europe is obviously not,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The European economy is heading toward recession next year, and I think it’s going to continue to weigh on markets.”

The MSCI Asia Pacific Index added 0.4 percent to 111.98 as of 10:50 a.m. in Tokyo, with about three shares rising for every two that fell. The gauge is headed for a 2.5 percent loss this week after Moody’s Investors Service and Fitch Ratings warned that Europe faces lower credit ratings as it struggles to contain its debt crisis.

Japan’s Nikkei 225 Stock Average added 0.3 percent, while South Korea’s Kospi Index gained 0.5 percent. Australia’s S&P/ASX 200 rose 0.4 percent.

Singapore’s Straits Times Index advanced 0.3 percent after the city-state’s exports unexpectedly rose in November as pharmaceutical sales countered weak demand.

‘Escalating’ Crisis

Futures on the Standard & Poor’s 500 Index (SPXL1) gained 0.2 percent today. The index rose 0.3 percent in New York yesterday after U.S. initial jobless claims fell by 19,000 to 366,000 last week, the fewest since May 2008. The median forecast of economists surveyed by Bloomberg News was 390,000.

Some exporters advanced as two reports showed manufacturing in the New York and Philadelphia regions expanded more than forecast in December.

Gains in stocks may be limited today after International Monetary Fund Managing Director Christine Lagarde said yesterday that Europe’s crisis is “escalating” and cannot be resolved by one group of countries.

The MSCI Asia Pacific Index declined 19 percent this year through yesterday, compared with a 3.3 percent drop by the S&P 500 and a 15 percent loss by the Stoxx Europe 600 Index. Stocks (MXAP) in the Asian benchmark were valued at 12.5 times estimated earnings on average, compared with 12.3 times for the S&P 500 and 10.2 times for the Stoxx 600.

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.