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Most Asian Stocks Advance before Fed Policy Decision

By Yoshiaki Nohara
September 13, 2012 6:34 AM EDT

Most Asian stocks gained amid speculation the Federal Reserve will announce another round of asset purchases at end of its two-day policy meeting today.

James Hardie Industries SE, a building-materials supplier that gets 67 percent of sales from the U.S., rose 1.2 percent. Kyushu Electric Power Co. led Japanese utilities higher on a report of a possible rate increase. TDK Corp., a battery supplier to Apple Inc., climbed 3.7 percent in Tokyo after the iPhone 5 was unveiled. Fortescue Metals Group Ltd., Australia’s third-biggest iron-ore producer, plunged 14 percent in Sydney on a report it sought a debt waiver from lenders.

The MSCI Asia Pacific Index added less than 0.1 percent to 120.8 as of 7:31 p.m. in Tokyo, with about 16 shares rising for every 15 that fell. The measure capped a five-day advance yesterday, the longest winning streak since July, amid bets China and the U.S. will act to spur growth in the world’s biggest economies.

“Looks like people are expecting some form of easing, and the market will wait for that uncertainty to be cleared,” said Matt Riordan, a portfolio manager who helps manage about $6.5 billion at Paradice Investment Management Pty. in Sydney. “Ultimately they will do something, but it’s an issue of timing whether they will do it now or they will wait toward the end of the year,” he said of the Fed deliberations.

The MSCI Asia Pacific Index gained 3 percent this quarter through yesterday as stimulus expectations outweighed signs of a global economic slowdown. The Asian benchmark traded at 12.5 times estimated earnings, compared with 13.9 for the Standard & Poor’s 500 Index (SPXL1) and 12.1 for the Stoxx Europe 600 Index.

Taiwan’s Taiex Index (TWSE) gained 0.1 percent. Japan’s Nikkei 225 Stock Average rose 0.4 percent. The MSCI Asia Pacific excluding Japan Index fell 0.2 percent. Australia’s S&P/ASX 200 lost 0.5 percent. The Shanghai Composite Index dropped 0.8 percent, while Hong Kong’s Hang Seng Index slid 0.1 percent.

Korean Rates

New Zealand’s NZX 50 Index declined 0.1 percent as the nation’s central bank kept the key interest rate unchanged. South Korea’s Kospi index was little changed as the Bank of Korea unexpectedly held borrowing costs stable.

Futures on the S&P 500 fell 0.2 percent today. The index added 0.2 percent in New York yesterday, when the Fed began a two-day meeting, on bets for added stimulus. The central bank will probably announce a third round of bond purchases today, according to almost two thirds of economists in a Bloomberg survey.

Exporters to the U.S. were mixed. James Hardie added 1.2 percent to A$8.70. Techtronic Industries Co., the Hong Kong- listed maker of Ryobi power tools, climbed 2.1 percent to HK$12.68.

Export Stocks

Toyota Motor Corp. (7203), a carmaker that gets 25 percent of its sales in North America, dropped 0.9 percent to 3,170 yen. Man Wah Holdings Ltd., a sofa maker that gets more than half its revenue from the U.S., slipped 1.5 percent to HK$3.35.

Utilities gained the most among the 10 industry groups in the MSCI Asia Pacific gauge after the Yomiuri newspaper reported without citing anyone that Kansai Electric and Kyushu Electric are considering rate increases. Kansai Electric advanced 9.3 percent to 543 yen. Kyushu Electric, which said it wasn’t the source of the report, added 9.5 percent to 509 yen.

Apple Inc. suppliers gained after the iPhone 5 was unveiled. TDK climbed 3.7 percent to 3,075 yen in Tokyo. Murata Manufacturing Co., which supplies capacitors for Apple’s smartphone, added 2.9 percent to 4,145 yen in Osaka.

China Stimulus

In China, massive stimulus measures would be “detrimental” to sustainable economic growth, the official Xinhua News Agency wrote in a commentary. That came after Premier Wen Jiabao on Sept. 11 signaled there’s more room for fiscal and monetary policy to support growth.

Belle International Holdings Ltd., a footwear maker that gets most of its revenue from China, sank 4 percent to HK$14.02. Gome Electrical Appliances Holding Ltd. (493), the nation’s second- largest electronics retailer, declined 3.5 percent to 84 Hong Kong cents. Agricultural Bank of China Ltd., the country’s third-biggest lender, slipped 1.4 percent to HK$2.78.

Leading declines on the Asian equity benchmark, Fortescue Metals (FMG) plunged 14 percent to A$2.99, the biggest drop since 2008. The Australian Financial Review reported it sought a debt covenant waiver from its lenders for the next 12 months. The company said in a statement after the market closed in Sydney that it’s discussing potential waivers in the event that covenants are put under pressure by extended volatility in the iron-ore market.

AU Optronics Corp. dropped 4.4 percent to NT$10.8 after U.S. antitrust authorities said Taiwan’s second-largest maker of liquid-crystal displays used in video screens should be fined $1 billion for price fixing.

To contact the reporter on this story: 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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