By Lynn Thomasson and Saeromi Shin - Jan 31, 2012 2:13 PM GMT+0700
Jan. 31 (Bloomberg) -- Sean Darby, global head of equity strategy at Jefferies Group Inc., talks about U.S. and emerging market stocks. He also discusses Europe's sovereign debt crisis and the U.S. economy. He speaks with Rishaad Salamat on Bloomberg Television's "Asia Edge." (Source: Bloomberg)
Jan. 31 (Bloomberg) -- Gao Ting, chief China strategist at UBS AG, talks about China's economy growth and stock market. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Jan. 31 (Bloomberg) -- Koji Endo, an auto analyst at Advanced Research Japan, talks about the nation's auto industry. Honda Motor Co. President Takanobu Ito forecast last week that business results at Japan’s third-biggest carmaker will climb to the highest in at least five years, led by sales of Accord sedans and Civic compacts in North America. Endo speaks from Tokyo with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Asian stocks rose, heading for the first back-to-back monthly gain since October 2010, after factory output in Japan climbed the most in seven months and Greece’s Prime Minister said debt-swap talks have made progress. Oil and the euro advanced.
The MSCI Asia Pacific Index (MXAP) added 0.4 percent as of 4:01 p.m. in Tokyo, bringing its January rally to 7.6 percent. Euro Stoxx 50 Index futures climbed 0.6 percent and contracts on the Standard & Poor’s 500 Index increased 0.2 percent. India’s Sensex index jumped 1.2 percent and the rupee advanced 0.3 percent, set for a record monthly gain. The euro strengthened 0.3 percent, while the dollar fell against most of its 16 major counterparts. Oil added 0.5 percent, ending a two-day drop.
“Greece is moving step by step to resolve its troubles, though the pace isn’t fast enough to give investors a big sense of relief,” said Chu Moon Sung, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees $29 billion. “Investors appear to think that their risk aversion may have been overdone.”
Greek Prime Minister Lucas Papademos said after the European Summit that he’s “strongly committed” to reaching a debt-swap pact with bondholders. European leaders left a Brussels summit late yesterday with no accord over how to plug Greece’s widening budget hole and German Chancellor Angela Merkel voiced frustration with the Athens government’s failure to carry out an economic makeover.
U.S. Earnings
Exxon Mobil Corp., United Parcel Service Inc. and Pfizer Inc. are among companies scheduled to report fourth-quarter results today. Earnings have topped analysts’ estimates at about two-thirds of the 172 companies in the S&P 500 that reported results since Jan. 9, data compiled by Bloomberg show. Ten-year Treasury yields increased one basis point to 1.86 percent today.
State Bank of India, the nation’s largest lender, rose 3.1 percent after winning $1.6 billion in government funding, ending a two-year wait. ICICI Bank Ltd., the largest private lender, jumped 3 percent before reporting earnings.
A measure of industrial companies gained 1 percent for the biggest advance among 10 industries in the MSCI Asia gauge. Japan’s factory production rose 4 percent in December as manufacturers made up for disruptions caused by Thailand’s worst floods in 70 years, according to a trade ministry report today. The median estimate of 30 economists surveyed by Bloomberg News was for a 3 percent gain.
Oil, Gold
Oil increased to $99.33 a barrel. Japan is the world’s third-largest crude consumer. Spot gold advanced 0.4 percent to $1,736.82 an ounce. The metal has climbed 11 percent this month, the best advance since August. Silver added 0.4 percent to $33.639 an ounce, bringing its January gain to 21 percent.
The euro strengthened to $1.3177. Euro-area unemployment probably rose to 10.4 percent in December, the highest since 1998, from 10.3 percent the previous month, according to the median estimate of economists surveyed by Bloomberg News. The European Union statistics office releases the data today.
Belgium is scheduled to sell 1.2 billion euros ($1.58 billion) of 168-day bills today, while Spain plans to sell bonds maturing 2015, 2016 and 2017 on Feb. 2. Fitch cut the ratings of Italy, Spain and three other euro-area countries on Jan. 27, saying they lack financing flexibility in the face of the regional debt crisis.
‘Positive Signs’
“We’ve seen some positive signs in Europe,” said Angus Gluskie, who oversees about $300 million as managing director at White Funds Management in Sydney. “We’re on a cusp of a Greek bond restructuring. They will agree on it but there will be some debate in the meantime.”
Malaysia’s ringgit strengthened 0.2 percent to 3.053 per dollar. The currency has climbed 4 percent in January, poised for the biggest monthly advance in almost two years. Bank Negara Malaysia said yesterday it would relax rules on interest-rate derivatives, debt and foreign-exchange trading. The central bank is expected to leave its benchmark overnight rate at 3 percent at a review today, according the median economist forecast compiled by Bloomberg News.
Taiwan’s Taiex index of shares rose 1.5 percent and the island’s currency gained 0.5 percent to 29.63 per dollar. Global funds bought $1.7 billion more Taiwanese stocks than they sold in January, the most in three months, exchange data show. The Indian rupee has advanced 6.9 percent for the month as foreign funds stepped up purchases of the nation’s assets.
“Funds are flowing into stocks and bonds amid some improvement in liquidity,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank Ltd. in Tokyo. “There’s a yield advantage as the Federal Reserve is likely to keep its rate near zero for a while.”
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Saeromi Shin in Seoul at sshin15@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
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