Asian Stocks Advance on U.S. Economic Reports, Weakening Yen
June 19 (Bloomberg) -- Asian stocks rose, paring the MSCI Asia Pacific Index's biggest weekly decline since March, as better-than-estimated U.S. economic reports boosted the dollar.
Canon Inc., which gets 28 percent of its sales from the Americas, jumped 3.6 percent as a weaker yen lifted prospects for overseas earnings. WorleyParsons Ltd. climbed 5.5 percent, leading energy stocks higher, after forecasting "good growth" for fiscal 2009. Mitsubishi Corp., a trading company that gets more than half its earnings from commodities, added 1.5 percent as copper prices rose in New York.
The MSCI Asia Pacific Index gained 0.4 percent to 100.97 as of 11:35 a.m. in Tokyo, with five stocks rising for every four that fell. The gauge has lost 4 percent this week, paring its rally from a five-year low on March 9 to 43 percent.
"It's a tug of war between the bulls and bears," said Matt Riordan, who helps manage about $3.2 billion at Paradice Investment Management in Sydney. "There's the belief that this is the start of the upturn and that things will keep improving, and on the flip side that things have come too far too fast."
Japan's Nikkei 225 Stock Average rose 0.6 percent, led by industrial-plant builder Chiyoda Corp., which climbed 5.6 percent after the Nikkei newspaper said the company won an order in Saudi Arabia. Elpida Memory Inc., Japan's biggest maker of memory chips, jumped 3.7 percent after the Nikkei said the company may apply for funding from the Development Bank of Japan.
Hong Kong's Hang Seng Index gained 0.4 percent, while Australia's S&P/ASX 200 Index added 0.2 percent.
Futures on the Standard & Poor's 500 Index rose 0.1 percent, while Treasuries advanced as yields near the highest level in a week lured some investors.
Leading Index
The S&P 500 climbed 0.8 percent yesterday as the New York- based Conference Board said its leading economic index rose 1.2 percent last month, exceeding the 1 percent gain estimated by economists. The Federal Reserve Bank of Philadelphia's general economic index jumped to the highest level in nine months.
The reports are the latest in a string of figures that have boosted optimism that the global economy is recovering, helping drive the MSCI World Index's 39 percent rally from a 13-year low on March 9. The World Bank yesterday raised its forecast for Chinese economic growth, while Japan's central bank upgraded its assessment of the country's economy on June 17.
"Some positive reinforcing pieces of economic data are helping things up," said Paradice's Riordan.
Rising Valuations
The MSCI Asia Pacific Index's decline this week, the first in five, came amid concern the rally since March had made stocks expensive relative to outlooks for profit. The average valuation of companies in the gauge rose to 1.5 times the net value of assets as of the end of last week, the highest level since Sept. 26, according to Bloomberg data.
Companies the measure trade at 23 times estimated net income, higher than 15.5 times for the S&P 500 Index and 12.8 times for Europe's Dow Jones Stoxx 600 Index.
Canon jumped 3.6 percent to 3,210 yen as the yen depreciated to as weak as 96.62 per dollar today from 95.88 at the 3 p.m. close of stock trading in Tokyo yesterday. A weaker yen boosts the value of overseas sales at Japanese companies.
Sony Corp., an electronics maker that gets a quarter of its sales from the U.S., gained 1.6 percent to 2,515 yen. Howard Stringer, the company's chief executive officer, told shareholders today that the company is "seeing steady progress" on a cost-cutting plan.
Best Performers
Mitsubishi Corp. gained 1.5 percent to 1,820 yen. BHP Billiton Ltd., the world's largest mining company, added 0.4 percent to A$34.82. Copper futures in New York and an index of six metals traded in London gained 0.6 percent yesterday.
Materials producers are the best performing of the MSCI Asia Pacific Index's 10 industry groups in the past month amid optimism a global economic recovery will spur commodities demand.
WorleyParsons rose 5.3 percent to A$24.20 after forecasting growth in fiscal 2009 and said contracts it won recently will support earnings in the 2010 financial year. The company also said it signed two nuclear power plant contracts in Egypt.
Chiyoda rose 5.6 percent to 808 yen in Tokyo after the Nikkei reported the company won a 100 billion yen ($1 billion) order in Saudi Arabia with Samsung Engineering Co. Seoul-based Samsung Engineering lost 0.6 percent to 84,500 won.
Elpida climbed 3.7 percent to 1,073 yen. The company may seek as much as 40 billion yen ($416 million) by selling up to 30 billion yen in preferred shares and borrowing a maximum of 10 billion yen, Nikkei said, without saying how it got the information.
The report isn't based on any announcement from Elpida, the Tokyo-based company said in a statement today. The company said earlier this year that it was considering applying for public funds.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net .
June 19 (Bloomberg) -- Asian stocks rose, paring the MSCI Asia Pacific Index's biggest weekly decline since March, as better-than-estimated U.S. economic reports boosted the dollar.
Canon Inc., which gets 28 percent of its sales from the Americas, jumped 3.6 percent as a weaker yen lifted prospects for overseas earnings. WorleyParsons Ltd. climbed 5.5 percent, leading energy stocks higher, after forecasting "good growth" for fiscal 2009. Mitsubishi Corp., a trading company that gets more than half its earnings from commodities, added 1.5 percent as copper prices rose in New York.
The MSCI Asia Pacific Index gained 0.4 percent to 100.97 as of 11:35 a.m. in Tokyo, with five stocks rising for every four that fell. The gauge has lost 4 percent this week, paring its rally from a five-year low on March 9 to 43 percent.
"It's a tug of war between the bulls and bears," said Matt Riordan, who helps manage about $3.2 billion at Paradice Investment Management in Sydney. "There's the belief that this is the start of the upturn and that things will keep improving, and on the flip side that things have come too far too fast."
Japan's Nikkei 225 Stock Average rose 0.6 percent, led by industrial-plant builder Chiyoda Corp., which climbed 5.6 percent after the Nikkei newspaper said the company won an order in Saudi Arabia. Elpida Memory Inc., Japan's biggest maker of memory chips, jumped 3.7 percent after the Nikkei said the company may apply for funding from the Development Bank of Japan.
Hong Kong's Hang Seng Index gained 0.4 percent, while Australia's S&P/ASX 200 Index added 0.2 percent.
Futures on the Standard & Poor's 500 Index rose 0.1 percent, while Treasuries advanced as yields near the highest level in a week lured some investors.
Leading Index
The S&P 500 climbed 0.8 percent yesterday as the New York- based Conference Board said its leading economic index rose 1.2 percent last month, exceeding the 1 percent gain estimated by economists. The Federal Reserve Bank of Philadelphia's general economic index jumped to the highest level in nine months.
The reports are the latest in a string of figures that have boosted optimism that the global economy is recovering, helping drive the MSCI World Index's 39 percent rally from a 13-year low on March 9. The World Bank yesterday raised its forecast for Chinese economic growth, while Japan's central bank upgraded its assessment of the country's economy on June 17.
"Some positive reinforcing pieces of economic data are helping things up," said Paradice's Riordan.
Rising Valuations
The MSCI Asia Pacific Index's decline this week, the first in five, came amid concern the rally since March had made stocks expensive relative to outlooks for profit. The average valuation of companies in the gauge rose to 1.5 times the net value of assets as of the end of last week, the highest level since Sept. 26, according to Bloomberg data.
Companies the measure trade at 23 times estimated net income, higher than 15.5 times for the S&P 500 Index and 12.8 times for Europe's Dow Jones Stoxx 600 Index.
Canon jumped 3.6 percent to 3,210 yen as the yen depreciated to as weak as 96.62 per dollar today from 95.88 at the 3 p.m. close of stock trading in Tokyo yesterday. A weaker yen boosts the value of overseas sales at Japanese companies.
Sony Corp., an electronics maker that gets a quarter of its sales from the U.S., gained 1.6 percent to 2,515 yen. Howard Stringer, the company's chief executive officer, told shareholders today that the company is "seeing steady progress" on a cost-cutting plan.
Best Performers
Mitsubishi Corp. gained 1.5 percent to 1,820 yen. BHP Billiton Ltd., the world's largest mining company, added 0.4 percent to A$34.82. Copper futures in New York and an index of six metals traded in London gained 0.6 percent yesterday.
Materials producers are the best performing of the MSCI Asia Pacific Index's 10 industry groups in the past month amid optimism a global economic recovery will spur commodities demand.
WorleyParsons rose 5.3 percent to A$24.20 after forecasting growth in fiscal 2009 and said contracts it won recently will support earnings in the 2010 financial year. The company also said it signed two nuclear power plant contracts in Egypt.
Chiyoda rose 5.6 percent to 808 yen in Tokyo after the Nikkei reported the company won a 100 billion yen ($1 billion) order in Saudi Arabia with Samsung Engineering Co. Seoul-based Samsung Engineering lost 0.6 percent to 84,500 won.
Elpida climbed 3.7 percent to 1,073 yen. The company may seek as much as 40 billion yen ($416 million) by selling up to 30 billion yen in preferred shares and borrowing a maximum of 10 billion yen, Nikkei said, without saying how it got the information.
The report isn't based on any announcement from Elpida, the Tokyo-based company said in a statement today. The company said earlier this year that it was considering applying for public funds.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net .
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